Remade Meeting 12

Remade in Brixton meeting

Notes 27 October 2009 (7pm)

Trinity Arms, 45 Trinity Gardens, London, SW9 8DR

Present: Ann Bodkin, Ben Anstis, Duncan Law, Emily Unwin (solicitor – advising on legal structure), Faith Kenrick, Hannah Lewis, Matthew Barrett, Mitchell Jacobs, Pauline Hili, Pawel Ryczan, Sophie Unwin, Stephen Edwards, Zoe Leventhal

Legal structure

NB although there were other items on the agenda, due to the complexity of the discussion about legal structure and the large number of people present, the whole meeting was given over to this item. The discussion was recorded in note form as follows…

  • Conversations to be had about legal structures of Remade + of TTB as a whole
  • Could set up Remade independently and fit into TTB afterwards

3 main structures which could work: Charitable company (charity), Community Interest Company, regular company.

Charitable Company:

  • Set up for public benefit
  • Governed by extra set of rules on what kind of financial operations allowed – can only trade to directly achieve purposes set up for
  • Can be restrictive, regulated by Charity Commission
  • Trustees typically can’t be paid for role, potential conflicts of interest
  • If commercial activities – typically has trading arm

Community Interest Company:

  • Set up specifically for social enterprise
  • Making sure assets of company are kept within it
  • Demonstrate public benefit to regulator
  • Can trade easily but can’t distribute assets
  • Can have shares but dividends capped
  • Directors can be paid for doing work

Downsides of CIC:

  • Some trusts (funders) don’t recognise CICs
  • No tax advantages (unlike charity)
  • Relatively new vehicle – known well in social enterprise world – but doesn’t have familiarity in wider world

Regular Company:

  • Normally has shares
  • Set up for profit

Latter 2 – can be limited by shares or by guarantee

Difference between them – what it’s set up to do

What types of activities do we want to do?

  • Education + engagement
  • Consultancy + innovation
  • Action research + knowledge-sharing with peers – international as well as national (Brixton as an international brand)
  • Community capacity-building
  • Enterprise seeding (+ Incubation?)
  • Training for businesses + engaging with businesses
  • Engaging with disaffected communities – how do we get the majority of Brixtonians to participate and make a better community for us all? Community self-esteem, value and access, community cohesion
  • Auditing tools / monitoring and evaluation – include “gross national happiness”! Social Return on Investment and similar – build model from the beginning
  • Campaigning – policy issues and new ways of doing things – e.g. waste as a central resource in new economy
  • Networking
  • Physical space – Usefulness Centre / Repair + Remaking shop + skill-sharing – people element – people not being waste, discarded, forgotten
  • Needs analysis of local area
  • Brokerage
  • Links between TTB groups inc Brixton Pound – using as currency for training + local value networks e.g. community composting
  • Administrative support and toolkits for smaller organisations – under Remade banner – harnessing human energy – “Viral charity”
  • Want legal structure which allows people to donate gifts in kind

Objectives? – e.g. (for TTB) Vision, promote and engage everybody in a low carbon future (Duncan) For Remade draft objectives see here (scroll down to Remade in Brixton section)

Issues to consider:

  • Enterprise seeding / incubation – would be problematic if charity – unless this is one of its charitable aims
  • Need to think carefully about what range of things you will want to be doing from the beginning
  • Can change purpose later but this can take time

Funding / income – potential sources:

  • Grant funding
  • Income from commercially minded activities – centred around jobs – centring things around hard to reach communities – employment, “giving people who most need work the work that most needs to be done” (Matthew). Lots of money going into getting people into jobs but there aren’t the jobs – especially green jobs.
  • Venture capital / private funding?
  • Shares?
  • Public private partnerships?
  • Subscription / membership?
  • Crowd-funding?

Key point – variety – need to adapt and be a dynamic, innovative organisation. Emily advises to be wary of pure charity structure – will limit group – would definitely be necessary to set up other groups to do different bits.

Emily advises – Community Interest Company limited by shares.

  • More dynamic, allows investment
  • Allows ppl involved in governance to also take an income from it

Ann – examples of CICs – lower division football clubs! Loyalty and passion – positive model – but is it appropriate to more complex aims?

Another example (Emily) – London Climate Change org – started as part of mayor’s office, now independent – has common umbrella but different strands of work in different directions

Why shares and not guarantee? Practical difference – if people want to put in money and get a return, shares is right option – can pay out dividend.

Points to note about shares:

  • Directors + shareholders can be the same people or different
  • Can set up voting structures so that shareholders have only 1 vote (not in proportion to shares) and on who shares can be sold to (e.g. local only)
  • Can cap dividends or have none (write this into articles)
  • Can set conditions on being a shareholder e.g. do 100 hrs volunteering

What structure would best preserve ethos and purpose?

Different structures: Members = directors Or directors + lots more members (shareholders)

Legal implications of becoming a director? Very broad at first:

  • File accounts
  • Report to regulator
  • Report to shareholders – follow company law
  • Responsibility for good management of company – “caretakers”, paperwork

Emily suggests start with something simple and build on over time

Set up company, then put it to CIC regulator – 4-6 weeks

At least 3 directors are required for a CIC. 5 of those present at the meeting agreed to become directors (for the interim period as the company is set up – not necessarily permanent): Hannah, Mitchell, Pauline, Sophie Unwin, Stephen. Sophie Broadbent (not present) has also expressed interest in becoming a director – tbc.

Process going forwards:

  • Emily to make start on articles and circulate questions to group as they arise
  • Straightforward set-up to begin with

Costs:

  • Companies house: reg = £20
  • CIC regulator: reg = free

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