Running Bunny Posted July 18, 2015 Posted July 18, 2015 We are in a position of having now secured our building, or rather the building being secured for us, that we have an opportunity to develop from a sessional playgroup to full daycare nursery provision. We have the PLA constitution and are aware of the rules regarding assets and money in the bank etc. However, is there a way that this can be transferred to the new business or are we bound by the constitution? We would be looking at no longer being a charity and being a limited company, unliess one of the other CIO type models might work. It seems daft (although I understand charity rules) to have to sell everything we have to have to buy it again or the new owner spending money on buying back the resources. We've also worked damn hard these last few years and have money for redundancy contingency, as stated, plus a healthy bank balance and the fact that it goes to the PLA is a tad stomach churning. Has anyone transferred from a playgroup to a nursery or has anyone got experience of dissolving a playgroup with a PLA constitution. Thanks RB x 1
finleysmaid Posted July 18, 2015 Posted July 18, 2015 . Yes it is perfectly possible. We were a charity pre-school run by committee until 2011 then moved and transferred to a company limited by guarantee that is a charity. We informed the PSLA who did very little but say ok!! be careful with your staff contracts to ensure they have an uninterrupted length of service. For accounting purposes we kept the old 'company' going for the following year until all the accounts had been signed off... check with your accountant about this. We transferred all assets to the new company name and registered at companies house etc etc
Running Bunny Posted July 18, 2015 Author Posted July 18, 2015 Thanks Finleysmaid - how does the charity aspect of the company part affect trading? Does it still mean you can't actually make a profit and the money has to be put back into the business? Is this a safer option than a purely limited company? I've read all the options but the details don't appear to have stuck in my end of term brain yet!! RB x 1
finleysmaid Posted July 19, 2015 Posted July 19, 2015 Thanks Finleysmaid - how does the charity aspect of the company part affect trading? Does it still mean you can't actually make a profit and the money has to be put back into the business? Is this a safer option than a purely limited company? I've read all the options but the details don't appear to have stuck in my end of term brain yet!! RB x As a charity you have an obligation to actually make a profit!!! ...I think people assume you can't but that's a load of tosh!!! However with a charity the profit stays in the company it is not taken by an individual ,just as a company keeps reserves For us we work on a not for profit basis ...in other words the profit's all belong to the company and the trustees do not get paid (like governors in school. ) If you are a sole trader or a partnership then you would take the profit yourself. Being a charity (which it sounds like you already are) allows us the opportunity to fundraise/apply for grants etc etc. Being a limited company means our trustees have limited liability in the event of any issues including problems with rent etc. As a charity we also get exemption on our rates (we would not be able to afford the building without this) Your accountant should be able to talk you through all this ...it is really important to invest in some sound advice...might feel expensive at the time but worth it (though as a small charity our accountant gave us free advice....this year is the first we are paying him for!!!) 2
Running Bunny Posted July 19, 2015 Author Posted July 19, 2015 Thank you so much, I'll pass this onto our Chair, who is looking to make the eventual changes and this sounds like it could fit our situation.
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