How did we form Humshaugh Net Zero?

When we decided to form Humshaugh Net Zero we spent time considering what structure we would need. This is the process we followed which you might find of interest.

To select the most suitable structure we need to decide upon a range of key factors.

We assumed that the plan was to create a structure of some sort through which the group can drive forward on a number of key issues and actions. It is therefore assumed that the required structure is more than a simple short-lived committee or action group made up of volunteers.

We chose to be a Community Interest Company

Where will the bulk of the income (including start up) come from?

  • Individual gifts and donations
  • Grants and fundraising
  • Private sector funding or donations
  • Selling services or goods
  • Who will be the members?

    • The wider community, regardless of involvement in activities will be invited?
    • Individuals in the community who commit to being active in supporting the work?
    • Local community organisations?
    • Parish Council?

    What is the purpose?

  • To benefit the members?
  • To benefit the wider community?
  • Or both?
  • Is the purpose charitable?

    Charitable purposes include things that contribute to:

    • relieving poverty
    • education
    • religion
    • health
    • saving lives
    • citizenship or community development
    • the arts
    • amateur sport
    • human rights
    • religious or racial harmony
    • the protection of the environment
    • animal welfare
    • the efficiency of the armed forces, police, fire or ambulance services

    Contracts, banking & trading

    • Will the organisation hold a bank account?
    • Will the organisation be required to sign any contracts?
    • Will insurance be required to cover any activities?
    • Will it sell anything?

    Board or committee?

    • Who will appoint/elect the Board/Committee?


    We looked at 4 different structures. We arrived at the following pros and cons for each type of structure before we chose the Community Interest Company (CIC)

    Simple committee or action group with time limited constitution

    • Members required and also a mechanism for agreeing who are members


    • Easy to form requiring little admin or structure


    • Accountability can be difficult, and some may see it as a ‘club’
    • Fundraising can be difficult as no real structure
    • Holding a bank account would have to be in the names of individuals


    • Has a simple constitution that sets out who the members are,
    • How the committee is elected etc


    • Easy to form requiring little admin other than managing a membership and meetings of the members as well as meetings of the committee.


    • Unincorporated so any liability lies with the committee members
    • Bank accounts and any contracts would be in the name of individuals

    Company Limited by Guarantee or Community Interest Company (CIC)

    • A Community Interest Company (CIC)  is a non charitable company which exists primarily to benefit a community or with a view to pursuing a social purpose, rather than to make profit
    • Incorporated Company (same structure as the village shop)
    • Has members


    • Can have an ‘asset lock’ meaning any assets or funds left after closure must be given to another similar organisation (if it is a CIC then it must have this asset lock)
    • No distribution of profits (if it is a CIC then it must have this)
    • Is a separate legal entity and can hold bank account and contracts in its own name.
    • Limited liability for members.
    • Funders are familiar with the structure


    • It’s a company and needs company administration.
    • The membership needs to be clear as the members have rights
    • The Board members are directors in law.

    Charity - a Charitable Incorporated Association (CIO)

    • Must have charitable purposes to be eligible


    • Liable for tax relief
    • Can apply for charitable funds and grants
    • Incorporated so is a separate legal entity and can hold bank account and contracts in its own name.
    • Funders are familiar with the structure.
    • No liability for members


    • Charity admin and regulation
    • Limitations on what the organisation can do and must comply with charity legislation
    • Can take a long time to register
    • Not suitable for all trading or making a profit.
    • Board members are charity trustees