Non-profit Making

[klc106]

Hi,

 

This may seem like a silly question but how do you become a non-profit making pre-school?

I am opening mine in September. I have set up a business bank account (does this mean I cannot be non-profit making?)

I am not a committee run pre-school. I am running the pre-school by myself.

 

Looking forward to your advice!!

[finleysmaid]

not for profit means that the money is used for the benefit of the pre-school and not for the owner/partner or company. So all the profit is put back into the business or kept in the business for future use

[klc106]

so is there any forms or anything you have to fill in or do you just say that you are a non-for profit making pre-school?

 

I will be putting everything back into pre-school after I have taken mine and other wages out and rental for the room.

 

Can I still be a non-profit making pre-school?

 

Sorry I am new to this so am not sure what I need to do.

[finleysmaid]

actually that is a really good question.... we have by tradition been a not for profit pre-school because of the way we were set up and this is what we have declared to the charities commission and our accountant but i'm not sure that i have ever been asked to prove it!! if in doubt perhaps check with an accountant. (do you have a parent who might be able to advise on this ?)...sorry not a very helpful answer

[narnia]

I'd check with your bank, as they are setting up your account, then with the tax office, and the charity commission.............that way, you'll have covered all the bases.

[finleysmaid]

i was thinking about this earlier ... i think if you are a sole trader you will be unable to operate under a not for profit basis because the profit will be classed as 'yours' even if you do not use it.

[louby loo]

Is it classed as a 'community interest project'? or something like that - we were looking into it last year when we had problems with our owner. We didn't get far with the looking though as things picked up in the end.

[fairygarden]

This is an extensive area and one I would suggest you get advice on. Are you the owner of the business, i.e. have you set it up out of your own funds etc. Is the premises yours etc?

 

You can run a business as not for profit (the term is not for, rather than non profit making as the aim is to make a profit but use it for the good of the business). We run as a Community Interest Company. That is we are a company limited by guarantee, run by a board of directors, who are each responsible to the sum of £1 should the company fail. Any profit we make must be put back into the business to directly benefit the community we serve. We have to state our community interest i.e. to provide high quality affordable childcare.

 

If you are sole owner and not limited by guarantee, you could be liable for a large sum of money should things go wrong.

 

I would suggest you take advice. Businesslink is a good place to start as there is some readable information about different formats of companies. Following this, you will probably need the advice of a solicitor.

 

Hope this helps

[diesel10]

I always thought groups were charities or owner led. If you wanted to group to be a charity you would need to register with the charity commision and have a committee otherwise all the profits you make are yours!

 

 

I think both ways have their downfalls.

[Guest]

Interesting topic which I have always had an issue with!

 

I own my nursery/pre-school but dod not any more money in than the 'non-proft making' committe run pre-school down the road!!

 

I don't make any profit after I have paid myself either and probably don't earn much more than any other manager but when I join up to certain organisations e.g. our local scrapstore, I have to pay a higher joining fee because I am a business!

 

Doesn't seem fair to me!

[Guest]

As Fairygarden stated the best version after extensive research was the Community Interest Company and we have a board of 3 Directors with the £1 guarantee and we take out salaries for jobs we have within the setting and everything else is in the company.

 

There are certain provisos you need to meet such as having a named non-profit making company to receive any profits you make if you fold the company and your mission statement and purpose needs to be accepted by these people:

http://www.bis.gov.uk/cicregulator/

and when you set up your business through Companies House you need to get it all passed which means that setting a company up goes from a 1 hour instant thing on the internet to 2 or 3 weeks waiting for assessment.

 

You also have set responsibilities such as providing a breakdown on the accounts for public record but the great thing is you can apply for things such as Awards for All (We've just been granted £9k for a new garden!! yeah) etc.

 

If you want any further advice I'd be happy to help as went through it all last year in April. By the way - as a CIC all your banking is free so you'd need to change your account anyway...