How Is a Society Registered in the UK?
Registering a society in the UK is a structured process overseen by the Financial Conduct Authority (FCA). Whether you aim to form a co-operative society or a community benefit society (BenCom), the procedure requires compliance with specific legal steps and obligations. In this article, we will outline the detailed process for registering a society in the UK, including necessary steps, requirements, and post-registration obligations.
1. Determine the Type of Society
The first step in registering a society is deciding the type of entity you wish to establish. There are two primary forms of societies in the UK:
Co-operative Society
A co-operative society exists to operate for the mutual benefit of its members. It promotes self-help, self-responsibility, democracy, and equality among its members, ensuring that all members actively participate and benefit from the society’s activities.
Community Benefit Society (BenCom)
A BenCom differs from a co-operative in that it is established to benefit the wider community rather than its individual members. Its primary purpose is to conduct activities that provide a social or environmental benefit to the public, and profits are generally reinvested back into the community rather than distributed among members.
Understanding these two categories is essential, as each has distinct objectives and legal criteria for registration. Ensuring your society aligns with one of these categories is the foundation of the registration process.
2. Create Governing Rules
Every society must establish a set of governing rules that outline its operations, membership rights, decision-making processes, and other key elements. These rules are essential for defining how the society will function, and they must comply with the legal requirements set by the FCA.
You have two options for drafting your governing rules:
Using Model Rules
Many sponsoring bodies offer model rules, which are pre-drafted templates that meet FCA requirements. These rules can significantly simplify the registration process, as they have already been reviewed for legal compliance. By adopting model rules, you can also reduce the registration fee.
Drafting Your Own Rules
If you prefer to create custom rules that reflect the unique needs of your society, you can draft your own. However, this process may be more complex and expensive, as the rules must still meet the FCA’s legal standards. Custom rules require a thorough review to ensure compliance, and the registration fees for societies with bespoke rules are generally higher.
3. Gather Members
A key requirement for registering a society is ensuring that it has enough founding members. The minimum membership requirement is:
- At least three members if the founding members are individuals.
- At least two members if both members are registered societies.
These members will be the founding core of the society and play a critical role in its establishment and early governance.
4. Complete the Application Form
To formally register your society, you must submit an application form to the FCA. This form, along with your governing rules and the appropriate registration fee, constitutes the formal application.
The registration fee varies based on the complexity of your submission:
- £40 if using model rules.
- Up to £950 if using custom-drafted rules.
The application form requires detailed information about your society’s purpose, structure, membership, and operations, so it is essential to ensure all information is accurate and complete.
5. Submit Your Application
Once the application form and governing rules are completed, you can submit your application through the Mutuals Society Portal, the quickest method for registering your society online. Alternatively, you may download a Word version of the application form and submit it via email or post.
The FCA typically processes applications within 15 working days, assuming all documents are valid and complete. Upon successful registration, your society will be listed on the Mutuals Public Register, and you will receive a certificate confirming your registration.
6. Post-Registration Obligations
Once your society is officially registered, it is important to understand that compliance with legal obligations doesn’t end there. Societies are required to maintain several ongoing duties to remain in good standing with the FCA.
Maintaining a Registered Office
Your society must have a registered office, which is the official address where the FCA and other authorities can send legal documents. This address must be kept up to date at all times.
Keeping a Register of Members
Your society must maintain a register of its members, listing each member’s name, address, and date of admission. This record is important for both internal governance and compliance with FCA regulations.
Annual Returns and Financial Accounts
Every registered society must file an annual return with the FCA, along with its financial accounts. These documents must be submitted within seven months of the end of the society’s financial year. Failing to submit these documents on time can result in penalties or deregistration.
Notifying the FCA of Changes
If your society undergoes any major changes, such as a change in its registered office, amendments to its governing rules, or changes in its membership structure, you must notify the FCA. Timely communication is critical to maintaining the society’s legal standing.
Conclusion
Registering a society in the UK involves a structured process that begins with determining the type of society, establishing governing rules, and gathering the required number of members. By following these steps and ensuring compliance with the FCA’s application process, your society can become a recognized entity under UK law. Additionally, post-registration obligations, such as maintaining a registered office, keeping a register of members, and submitting annual returns, are essential for ensuring your society remains in compliance with its legal responsibilities.
By adhering to these guidelines, your society can successfully register and operate within the UK’s regulatory framework, allowing it to focus on achieving its objectives—whether for the benefit of its members or the wider community.