Keep it Legal: Incorporation

By Ros Harwood, Third Sector, 20 August 2008

If an unincorporated charity owns or occupies property, employs staff or enters into contracts with third parties, its trustees should consider incorporation in order to reduce the risks of a claim being made against them as individuals.

Losses incurred by a charitable company fall on the corporate body rather than on the trustees personally. Provided the trustees acted honestly and reasonably, and were not in breach of trust, the company would simply be wound up if its assets were insufficient to meet its liabilities. Limited liability protection...