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A glossary unpicking some of the key terms.


A useful or valuable possession of an organisation

Asset lock

Assets can not be distributed to members


The group of individuals ultimately responsible for the strategic management of your organisation

Charitable objects

The objects defined in English and Welsh law as charitable

Charitable incorporated organisation

The new incorporated legal form for charities

Charity Commission

The charity regulator


Community interest company – a legal vehicle created for non-charitable social enterprises

CIC Regulator

The community interest company regulator


The Charitable Incorporated Organisation (CIO) is a new incorporated form created by the Charities Act 2006. Many aspects of the CIO are similar to those of a company limited by guarantee, but the CIO can only be used by an organisation which is charitable.


Company limited by shares


Company limited by guarantee

Community Benefit Socieites

Businesses that are run for the benefit of the wider community, re-investing profits in the community

Companies House

The registrar for all companies.


The governing document of an organisation, for companies this is called its Memorandum and Articles of Association, for Co-operative Societies it is its Rules.


To appoint a director usually by resolution of the other directors of an organisation.

Co-oprateive Societies

Businesses that are run for the benefit of their members, distributing profits between their members

Corporation tax

The tax paid by companies on their profits

Debt finance

Raising money by borrowing


Dissolving an organisation


Distributions of profit by a company

Equity finance

Raising money by selling shares

Equity investment

Raising money by selling shares

Excluded company

A company which cannot be a community interest company (CIC) under the CIC regulations

Exempt charity

A charity which is exempt from registration usually because other regulator has jurisdiction. There is a specific list of organisations which benefit from this exemption in the relevant legislation. Under the 2006 act this exemption is coming to an end so that most exempt charities will need to register in future

Excepted charity

A charity which is excepted from the duty to register with the Charity Commission. These include charities associated with the armed forces and the Scout and Girl Guide Associations.

Gift aid

The tax relief available on donations of cash to charity


Gifts of funding

Incorporated business

A legal entity in its own right


Becoming an incorporated organisation


Organisations and individuals who transfer funds to an organisation in expectation of a return

Limited liability

Whereby a person's financial liability is limited to a fixed sum


Limited liability partnership


Monies lent in return for the payment of interest


The members of an organisation

Memorandum and Articles of Association

The constitution of a company

Net assets

Gross assets minus liabilities


The aims of an organisation as detailed in its constitution

Office of the Third Sector

The Government department responsible for the Third Sector

Performance related interest

Interest on a loan which is calculated according to the organisation’s performance.

Pre-commencement societies 

These are industrial and provident societies, registered before 1 August 2014.

Primary purpose trading

Trading in furtherance of a charity's charitable objects


The income made by an organisation after deduction of expenses.


Land, buildings and other assets

Public/community benefit

Benefit to the public, a requirement of charitable status. Also central to Community Interest Companies and IPS community benefit societies

Rate relief

The tax relief available for charities and sometimes voluntary and community organisations from rates


The Government rules which regulate an organisation


Being accountable

Secured loans

A loan which is secured against property, like a mortgage

Share capital

A nominal figure which is used to represent the total net assets


The owners of the company limited by shares

Significant asset

An asset of high value such as a building

Social mission

The non-commercial purpose of a social enterprise

Sole trader

An individual in business alone

Stamp duty

The tax paid on property transactions

Tax relief

Relief from taxes

Total incoming resources

A charity's 'total incoming resources' means the charity's total receipts from all sources, including grants, donations, investment income and trading receipts.

Trading subsidiary

A company with a sole member which is a charity. The trading subsidiary is usually established to carry out trading activities which a charity is not able to carry out itself.


A type of legal entity without limited liability.

Unsecured loans

A loan which is not secured against property

Unincorporated organisation

A type of legal entity without limited liability.

Page last edited Mar 23, 2016

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