Legal personality describes the way that a company or society exists as a “person” in its own right, separately from the people who own or manage it. The practical effects of legal personality include:
- If a limited company is dissolved owing debts to creditors, the owners of the company are not personally liable for the company’s debts: their liability is limited to a specified amount:
- In the case of a company limited by shares, the amount that the company’s founding shareholders paid for their shares
- In the case of a company limited by guarantee, the amount that the company’s founding members pledged to pay towards the company’s debts
- In both cases this is often a token amount such as £1
- If the company owns assets, these assets are not the personal property of the people who own or manage the company. If a company is dissolved having both assets and creditors, the assets must first be used to pay off the creditors before the owners of the company can take any money or property for themselves.
Regulation 2 of the Housing Benefit Regulations 2006 defines a voluntary organisation as “a body, other than a public or local authority, the activities of which are carried on otherwise than for profit”.
What is a registered charity?
A registered charity means one that is registered with the appropriate charity regulator:
- In England and Wales the Charity Commission
- In Scotland the Office of the Scottish Charity Regulator
If a charity is registered with either of these regulators it satisfies the exempt accommodation landlord requirements.
Registered charities will tend to be one of the following:
- A company limited by guarantee (registered with both Companies House and the charity regulator)
- Since March 2013 a Charitable Incorporated Organisation (registered with the charity regulator only)
- This is a new corporate status intended to reduce the bureaucratic burden on charities. The CIO has its own legal personality and its members and trustees have limited liability, but the CIO is regulated only by the charity regulator and not by Companies House.
- An unincorporated charity run by trustees (registered with the charity regulator only)
There is a fourth form of incorporation: a registered society (see “Tell me more about registered societies” below). Many registered societies are regarded as charities for general purposes (eg taxation). But the charity regulator does not register charitable societies and so it is not entirely clear whether a charitable society is a registered charity for Housing Benefit purposes. In most cases this will not matter because a charitable society is likely to satisfy one of the other exempt accommodation landlord requirements such as “housing association” or “voluntary organisation”.