What business structure to choose or change to

Your business structure will affect how much you will have to pay in tax, the ease of paperwork, personal liability and how you can raise money. You need to chose a business structure before registering your business. Don’t worry, it doesn’t have to be daunting. We’ve  broken down the business structures that are suitable for a school club.

Think about how much paperwork you can handle, how much money you need to raise and how much liability you’re willing to shoulder.

Business structures

There are several different business structures you could consider. If you are a social enterprise, a company founded for the purpose of the betterment of society and the needs of community where profit is rechannelled into the company to continue the mission, consider the last four structures, all forms of registered charities.

Sole trader, the profits are registered and taxed as your personal income. Quick to set up, easy to run, this is the simplest model, but you are completely responsible for all debts, all liability issues and there is no support.

Partnership, means that you can set up your business with one or more people but you will still have a simple business structure. Partnerships are easy to set up and run but there can be issues with sharing or responsibilities. It may seem trivial at the beginning, but if there are disagreements further down the line, you need to make sure you are covered. You must make a formal agreement in writing, that sets down in a legally binding manner, the shared responsibilities of your business.  A lawyer can help you for a small fee as it is a relatively simple document. Again, unlimited liability and all debts are yours.

Limited liability partnership (LLP), you enjoy the same skill and experience sharing of a partnership but you can limit your liability for debt, meaning the debts are the business’s not yours so you could sell the business and its debts or make the business bankrupt without affecting your own bank account. On the other hand, it’s complicated and can be costly to set up. If there are disagreements between the partners, things can get very messy, so make sure you have adequate contracts in place between you. Partners must comply with legal requirements, such as submitting audited accounts to Companies House.

Private limited company (LTD),  this is the most expensive and complex form of business structure, Being a private limited company means there is a low personal financial risk from your investments and any debts or guarantees relating to the business. You are required to have at least one director and a company secretary. The directors must submit annual accounts, hold meetings and maintain the company’s public records as well as comply with any company house legal obligations. Private limited companies may not obtain or hold charitable status.

Company limited by guarantee (LTD), a quite different structure, this company model is mainly used by nonpoint companies that still want legal status.  They may be classified as a charity. They do not have share capital or shareholders, rather members who act as guarantors themselves. Directors have to comply with normal companies’ legislation, but their liability is protected. All funds must be channelled back into the business and may not be taken as profit by shareholders or members. Wages are not considered profits.

Community Interest Company (CIC), are special companies that have been created for those who wish to run a company for the benefit of the community rather than their own bank balances. The CIC Regulator must approve the registration of a company as a CIC and checks out that it really is established for community purposes and that its assets and profits are dedicated to these purposes. CIC companies are heavily regulated to ensure that they remain community minded.

Registered charity, if you do not have a lot of money available this is the best option for your school club. The charity is run by a management committee comprised of volunteers]. Th committee may apply for grants from charitable trusts and foundations. The problem with becoming a registered charity is the immense amounts of paperwork and the difficulties involved in finding enough dedicated volunteers who are willing to be on the committee. The club must be registered with charity commission and the members must all be DBS checked.

Co-operative a socialist style enterprise where the members who use the company are the owners. They are founded and run for the needs of the members. The members elect a board of directors. Debts belong to the co-op, there is no profit taking and liability is shared among the directors.

By becoming a member of ICAP you’re joining a community of like-minded professionals and business owners in the children’s activity sector working towards excellence

Pip Wilkins

Pip Wilkins is the Chief Executive of the British Franchise Association (bfa). With 25 years’ experience in the franchise sector, Pip has worked her way up within the Association, gaining insight from all areas of the business and the franchise industry. She is well-known and highly regarded in franchising for her dedication and depth of knowledge. Pip regularly speaks at conferences and seminars both domestically and internationally, as well as writing on franchising matters for national, local and franchising trade press. Pip is also a regular judge for the annual bfa HSBC Franchise Awards, the Franchise Marketing Awards and Global Franchise Awards. Pip represents the UK at both the European Franchise Federation (EFF) and World Franchise Council (WFC). The bfa has grown to be one of the largest franchise associations in Europe, and one of the most successful associations in the world.

Theo Millward

Theo Millward is a graduate of Lancaster University with a BBA in Management. In 2016 Theo purchased UK swim school, Swimtime from the founders which teaches 20,000 children a week. Following a multi-award- winning digital transformation, during the global pandemic, Theo and his team founded Franscape, a saas that digitally transforms Franchise brands. FranScape won New Business of the Year at the UK Business Awards.

Andy Georgiou

Andy is the Founder of ICAP and a leading UK Franchise Business Consultant. He is fiercely committed to helping children’s activity providers build successful and profitable businesses. With qualifications in Business Management, Digital Media and Marketing, he has helped build, advise and grow leading 6 and 7 fiqure children’s education, sports and activity brands in the past 17 years.

Frank Sahlein

Frank has been active in the Children’s Activity Center industry as an athlete, coach, business owner, consultant and business broker. He is a native of San Mateo, California and graduated from San Jose State University in California (USA).
Frank was a pioneer of the Children’s Learning Opportunity Center concept from 1976 – 2016 at the Wings Center in Boise, Idaho (USA) – a blend of Sports Instruction, Arts, Education, Entertainment and Outreach programs.
As a business management innovator, Frank has delivered over 1,000 presentations for a variety of Children’s Activity Center industries such as gymnastics, swimming, cheerleading, dance, martial arts/ninja and child care/education.
3rd Level Consulting is a Business Development and Service Provider Partner for private industry companies, associations, and organizations in the USA, Australia, Canada, New Zealand, Singapore, the United Kingdom, Mexico, and Panama.
Two-time recipient of the National Business Leader Award from USA Gymnastics, Frank is the author of “Building Your Business Potential” and “Designing Your Empowered Life”. He is the creator of the SmartEDGE™ Business Applications and Management Certification Courses. He is the co-founder of LEAP Learning and the MetaSpheres Corp, and is the founder and Executive Director of the International Association of Child Development Programs.
His passions include his beautiful wife Lourdes Gonzalez, family, friends, fitness training, transformational reading and travel.