Which statement correctly describes a charitable company?

Which statement correctly describes a charitable company?

• A. It is a non-profit organization without a formal corporate form.
• B. It is a charity without any corporate form.
• C. It is governed by a trust deed.
• D. It is a registered company limited by guarantee.

Answer: (C)

A charitable company is a charity that has corporate form. Specifically, it is a company registered at Companies House and also registered as a charity with the Charity Commission, with liability of members limited by guarantee rather than by shares. Governance is through the articles of association and a board of trustees (the directors), not by a separate trust deed. A trust deed governs a charitable trust, not a charitable company. Because of this, the statement that describes a charitable company is that it is a registered company limited by guarantee. The other descriptions misstate the corporate form or the governance structure.

A charitable company is a charity that has corporate form. Specifically, it is a company registered at Companies House and also registered as a charity with the Charity Commission, with liability of members limited by guarantee rather than by shares. Governance is through the articles of association and a board of trustees (the directors), not by a separate trust deed. A trust deed governs a charitable trust, not a charitable company. Because of this, the statement that describes a charitable company is that it is a registered company limited by guarantee. The other descriptions misstate the corporate form or the governance structure.