Rate Relief
Charities typically enjoy full rate relief on property they own, resulting in substantial savings for the charity.
The property however must be must be occupied and used by the charity for solely charitable purposes. Such charitable purposes may include the 'advancement of education' or the 'relief of poverty'.
Confusion can arise where part of the property in question is used for non-charitable purposes. Land & Property Services will apportion the rate relief based on the proportion of the premises used for the respective charitable & non-charitable objectives.
Example: A charity shop does not have to pay rates if it sells only donated goods but if it was to sell goods purchased from a wholesaler then the value of relief is apportioned between the two uses.
Tuesday 15 June 2010
Thursday 10 June 2010
Industrial & Provident Society Forms (Bona Fide & BenComm)
An Industrial & Provident Society (IPS) can take one of two distinct forms, namely that of a Bona Fide Co-operative or a Society for the Benefit of the Community (BenComm).
A Society may register as an IPS if it:
(1) carries on any industry, business or trade, whether retail or wholesale AND
(2) is either one of the two aforementioned forms.
But what is the difference between a Bona Fide Co-operative and the BenComm?
Bona Fide Co-operative
A Bona Fide Co-operative is an incorporated society which acts for the mutual benefit of all of its members.
Whilst there is no statutory definition of a Bona Fide Co-operative certain criteria has been laid down defining this form:
(1) Members' benefits in the main stem from their participation in the business of the society
(2) Control of the society is vested in members equally, through the principle of 'one person, one vote'
(3) return on capital does not exceed a rate necessary to retain sufficient capital to carry out the society's objectives
(4) Any profits after payment of interest will, if distributable amongst the members, be distributed in proportion to the extent to which members have traded with or taken part in the society's business
(5) Membership will not be restricted artificially with the object of increasing the value of proprietary rights and interests.
The criteria is designed to ensure that members interest in the society is not based solely on the amount of capital they have put into the organisation.
Example: members of a social club serving current and former transport workers. The members interest in the club is a genuine community one shared with fellow and former work colleagues. A person does not join with the sole aim of obtaining some financial return, although that may occur in some circumstances.
Indeed, the legislation governing IPS states that a Co-operative society does not include a society which carries on, or intends to carry on, business with the object of making profits mainly for the payment of interest, dividends or bonuses on money invested or deposited with, or lent to, the society or any other person. Such co-operative entities would likely incorporate as a company instead.
Society for the Benefit of the Community (BenComm)
Unlike the Bona Fide form, a BenComm will act for the benefit of the community rather than just its members.
Profits will not be distributed among members but will be returned to the community. A BenComm is one of the many legal structures employed by Social Enterprises. A BenComm may also be a charity although this will depend on its constitution and objectives.
Special reasons must be given as to why the society should not be registered as a company. Its rules should also prohibit the distribution of assets among members.
Example: Housing Associations are often registered as BenComms as they serve the interests of the wider community rather than the narrow spectrum of their membership.
Both forms must adhere to the general conditions relating to societies as governed by the Industrial & Provident Societies Act (NI) 1969 (The Co-Operative and Community Benefit Societies Act 1965 in England & Wales - formerly referred to as Industrial & Provident Societies Act 1965)
A Society may register as an IPS if it:
(1) carries on any industry, business or trade, whether retail or wholesale AND
(2) is either one of the two aforementioned forms.
But what is the difference between a Bona Fide Co-operative and the BenComm?
Bona Fide Co-operative
A Bona Fide Co-operative is an incorporated society which acts for the mutual benefit of all of its members.
Whilst there is no statutory definition of a Bona Fide Co-operative certain criteria has been laid down defining this form:
(1) Members' benefits in the main stem from their participation in the business of the society
(2) Control of the society is vested in members equally, through the principle of 'one person, one vote'
(3) return on capital does not exceed a rate necessary to retain sufficient capital to carry out the society's objectives
(4) Any profits after payment of interest will, if distributable amongst the members, be distributed in proportion to the extent to which members have traded with or taken part in the society's business
(5) Membership will not be restricted artificially with the object of increasing the value of proprietary rights and interests.
The criteria is designed to ensure that members interest in the society is not based solely on the amount of capital they have put into the organisation.
Example: members of a social club serving current and former transport workers. The members interest in the club is a genuine community one shared with fellow and former work colleagues. A person does not join with the sole aim of obtaining some financial return, although that may occur in some circumstances.
Indeed, the legislation governing IPS states that a Co-operative society does not include a society which carries on, or intends to carry on, business with the object of making profits mainly for the payment of interest, dividends or bonuses on money invested or deposited with, or lent to, the society or any other person. Such co-operative entities would likely incorporate as a company instead.
Society for the Benefit of the Community (BenComm)
Unlike the Bona Fide form, a BenComm will act for the benefit of the community rather than just its members.
Profits will not be distributed among members but will be returned to the community. A BenComm is one of the many legal structures employed by Social Enterprises. A BenComm may also be a charity although this will depend on its constitution and objectives.
Special reasons must be given as to why the society should not be registered as a company. Its rules should also prohibit the distribution of assets among members.
Example: Housing Associations are often registered as BenComms as they serve the interests of the wider community rather than the narrow spectrum of their membership.
Both forms must adhere to the general conditions relating to societies as governed by the Industrial & Provident Societies Act (NI) 1969 (The Co-Operative and Community Benefit Societies Act 1965 in England & Wales - formerly referred to as Industrial & Provident Societies Act 1965)
Wednesday 2 June 2010
Intellectual Property and Social Enterprises
Intellectual property is an integral aspect of any business and social enterprises are no different in this regard. Yet this often confusing legal concept can cause headaches for even the most savvy business as they attempt to grapple with the rights of ownership of their ideas, products or services.
So what is 'intellectual property' and how does it impact on social enterprises?
Copyright
Copyright is the protection of an idea which has been expressed in some tangible form. In general terms this can include paintings, music lyrics, novels, photographs architecture etc.
When a social enterprise creates an original piece of work then that work is automatically copyrighted. This work may include a operational manual for the running of the enterprise or an article in a magazine detailing the business model or the photographs found on the enterprises website.
A copyrighted work cannot be reproduced, altered or distributed by another party without the creators permission. To do so creates an infringement of the copyright.
There are important commercial implications for a social enterprise in protecting any copyrighted work. By protecting the integrity of the works, they then can then be licensed transferred or assigned by the social enterprise for a fee which would generate income for the business. An example of this in action would include the allowing of a social franchisee to use/adapt the social franchisors operations manual.
Patents
A patent can be defined as a Government licence giving an individual or body the sole right to make, use or sell an invention for a set period.
Whilst not giving automatic rights like that found in copyright it does provide protection against any other parties copying, manufacturing or selling your invention without your permission as long as the patent is registered with the relevant authorities.
Again the commercial opportunities enjoyed by any enterprise which holds a patented invention are significant. The patent could be sold or licensed for a fee or the enterprise could even use the invention as part of its business activities to increase profits.
Trademarks
A trademark can be defined as a distinctive symbol or word(s), legally registered or established by use, as representing a company, product or person.
Many of the most common examples of trademarks can be found in the logos of major companies: the Nike tick or the Adidas stripes.
The protection of trademarks are vitally important as they represent the very essence of an enterprise. If another party was to set up a business using your company name, logo and other trademarks it could pass itself off as another part of the original business. It would in effect be exploiting the goodwill which that business has built up over the years and which might otherwise be directed towards the original enterprise.
So what is 'intellectual property' and how does it impact on social enterprises?
Copyright
Copyright is the protection of an idea which has been expressed in some tangible form. In general terms this can include paintings, music lyrics, novels, photographs architecture etc.
When a social enterprise creates an original piece of work then that work is automatically copyrighted. This work may include a operational manual for the running of the enterprise or an article in a magazine detailing the business model or the photographs found on the enterprises website.
A copyrighted work cannot be reproduced, altered or distributed by another party without the creators permission. To do so creates an infringement of the copyright.
There are important commercial implications for a social enterprise in protecting any copyrighted work. By protecting the integrity of the works, they then can then be licensed transferred or assigned by the social enterprise for a fee which would generate income for the business. An example of this in action would include the allowing of a social franchisee to use/adapt the social franchisors operations manual.
Patents
A patent can be defined as a Government licence giving an individual or body the sole right to make, use or sell an invention for a set period.
Whilst not giving automatic rights like that found in copyright it does provide protection against any other parties copying, manufacturing or selling your invention without your permission as long as the patent is registered with the relevant authorities.
Again the commercial opportunities enjoyed by any enterprise which holds a patented invention are significant. The patent could be sold or licensed for a fee or the enterprise could even use the invention as part of its business activities to increase profits.
Trademarks
A trademark can be defined as a distinctive symbol or word(s), legally registered or established by use, as representing a company, product or person.
Many of the most common examples of trademarks can be found in the logos of major companies: the Nike tick or the Adidas stripes.
The protection of trademarks are vitally important as they represent the very essence of an enterprise. If another party was to set up a business using your company name, logo and other trademarks it could pass itself off as another part of the original business. It would in effect be exploiting the goodwill which that business has built up over the years and which might otherwise be directed towards the original enterprise.
Tuesday 1 June 2010
Legal Issues facing the social economy sector
If there are any general legal issues facing the social enterprise sector which you would like me to post on please fell free to make a comment below, or alternatievely, you can email at the address provided.
Regards
Conor
Regards
Conor
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