This section looks at some important aspects of how childcare businesses are structured.
Types of Business
What are the important differences and the risks involved, between different types of businesses that a provider could establish to operate a childcare setting? This section covers information on sole traders, partnerships, voluntary management committees, limited companies, companies limited by guarantee and Charitable Incorporated Organisations.
Charitable Status and Trustee Responsibilities
Introduction to the concept of being a registered charity and the role and duties of a trustee. (all voluntary sector providers should consider registering as charities, but there are obligations as well as benefits). This section also touches briefly on the new 'Charitable Incorporated Organisations' (CIO), and gives contact details for the Charity Commission and Nottingham Council for Voluntary Service.
Registering as a Company Limited by Guarantee
Any voluntary sector childcare provider but the very smallest should seriously consider registering as a 'Company Limited by Guarantee'. The main advantage is that there is no 'personal liability' for debts if the business folds. This guide explains the process and requirements and points out that becoming a company and becoming a charity are separate, though there are often related issues.
Directors' Liabilities in Companies Limited by Guarantee
When people are asked to become directors (or trustees) of businesses run as 'Social Enterprise Companies', they often ask "but shall I be personally liable for the business's debts if things go wrong?" This handout explains how 'Companies Limited by Guarantee' work, reassures them they won't ordinarily be personally liable, and explains the two situations where, exceptionally, they just might.
Note: This protection does not extend to Voluntary Management Committees (i.e. that aren't Limited Companies).
Social Enterprises and Childcare
This guidance explores the differences between 'Social Enterprises' and more traditional Voluntary Sector models of childcare provision. It looks at the features, advantages and disadvantages, and how Social Enterprise childcare can be developed or converted.