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Model railway club becomes one of first Charitable Incorporated Associations
Article date: 07/10/2013
A model railway club run from the Midlands but with members across the world has become one of the first organisations to use the new Charitable Incorporated Association vehicle (CIO).
Leading Midlands law firm, Higgs & Sons, provided expert legal advice to Warley Model Railway Club, and lawyers at the firm say that many charities and not for profit organisations won't be aware that they too can benefit from the new corporate vehicle.
Kirsty McEwen, Higgs' specialist charity lawyer, guided the railway club which was formed in 1966 and has 180 members, through the process. She said: "Warley Model Railway is a membership association holding events across the year and even has its own annual exhibition at the NEC each November.
"In view of its activities, it was clear that the Club was operating as a charity in law and as its income was over £5k per annum, it was required to register as a charity with the Charity Commission.
"The decision was taken as part of that process, to incorporate the Club, so as to provide limited liability for the members going forward. The members decided to use the new CIO, which is a vehicle designed exclusively and specifically for charities, allowing for the benefit of being corporate without the burden of being a company."
Warley Model Railway Club is an extremely active group. The Club provides facilities to members to construct working model railway layouts in a wide variety of layout scales and gauges. It also provides educational instruction as to the processes used in constructing model railway layouts, on the history of railways and allied transport systems and has an extensive reference library. The Club welcomes people of all age and has a Junior Den to encourage the pursuit of model railwaying amongst its youngest members.
Paul Jones, a partner in JWHinks LLP who have provided tax and accounting advice to the Club, and who is exhibition manager for Warley MRC Exhibitions Limited, which is the wholly owned trading subsidiary of the new CIO. He said: "Kirsty worked in partnership with us from the outset, guiding us through the legal process. I would definitely encourage other groups in a similar situation to us to look at this as an option as Kirsty made it all pain free.
"There are two main benefits for us in becoming a CIO. Firstly it will offer us better protection of our funds and secondly we will be subject to charity law by becoming a registered charity."
Kirsty says that the CIO vehicle will not be appropriate in every situation. "A CIO provides an alternative to the traditional company limited by guarantee vehicle. The simplicity of the CIO is that it is a corporate form, with all the benefits of the limited liability and legal personality of its own, but it is governed entirely by charity law and subject to the jurisdiction of only one regulator - in England and Wales, the Charity Commission."
Whilst the Charity Commission has produced two model governing documents for the CIO, anyone thinking of settling up a CIO needs to consider a wide range of legal issues and requirements and it is recommended that they take specialist advice on the setting up and registering of the CIO with the Charity Commission.
For specialist advice on all aspects of charity law, contact Kirsty on 0845 111 5050 or email firstname.lastname@example.org
Picture: l-r Alf Fantham, Trustee and Chairman, Paul Jones, JWHinks LLP, Kirsty McEwen, Higgs & Sons, David Crawford, is a Trustee and is Treasurer.