Shared services for collaborative working


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Outlining the different services available for collaborative working.

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Shared services for collaborative working

  1. 1. Collaborative Working & AgreementsWith Trading SubsidiariesKaren Collins, Senior AssociateWednesday 16th May 2012
  2. 2. Collaborative Working Overview• Why collaborate?• Legal structure of the collaboration – the options• The first steps – key considerations• Contractual collaborations – Key legal issues
  3. 3. Why collaborate? “All charities should consider seriously and imaginatively whether there are ways in whichthey could do more for their beneficiaries by working together” Charity Commission CC34
  4. 4. Why collaborate?Advantages include:• Reduction in overheads• Sharing of skills• Reduce duplication of effort
  5. 5. Legal structure – the options• Contractual collaboration• New legal entity
  6. 6. Legal structure – contractual collaboration• Not a legal partnership• Features of a legal partnership: • no separate legal personality • no limited liability • no set management structure • carrying on business for profit • accounts/tax • assets are partnership property • partners are agent for each other
  7. 7. Legal structure – contractual collaboration• Colloquial meaning of “partnership working”• 2 or more charities/organisations• Remain separate entities• Specific project/venture• General sharing resources/costs• Detail set out in a contract
  8. 8. Legal framework – contractual collaborationKey features of contractual collaboration• No separate legal entity • no transfer of assets or employees • contracts must be entered into by one or more participants• Collaboration liabilities are not ring-fenced• Allocation of profit and costs• No set management structure• Cannot raise funds independent of participants
  9. 9. Legal structure – new legal entity• Replacement entity - merger• Additional entity – joint venture company or limited liability partnership
  10. 10. Legal structure – new legal entity• Key features of LLP • carrying on business for profit • separate legal entity: can own assets, have employees • members’ liability is limited to capital contributions • flexible management structure • can borrow funds • tax • statutory disclosure and filing requirements
  11. 11. Legal structure – new legal entity• Limited liability company – by guarantee or shares• Key features • Familiarity • Separate legal entity so can own assets, employees, enter contracts etc • Can borrow funds • Limited liability • Taxed on own profits • Statutory disclosure and filing requirements
  12. 12. Legal structure – which to choose?• Ability to use relevant structure• Objectives of the collaboration• Relative voting power of each participant• Need to ring-fence the collaboration liabilities
  13. 13. Working together: the first steps• Understanding • your objectives • your culture • your limitations
  14. 14. Working together: the first stepsChoosing the right partners• The importance of getting it right• The importance of “soft issues” • Politics • Cultural • Policies • Practical implications – redundancies? Compatible IT systems?
  15. 15. Working together: the first steps• Be open and up front about • Fears • Outcomes • Disputes • Exit strategies• Trust between partners is key
  16. 16. Contractual collaboration: key legal issues• Who is doing / providing what?• By when?• Management / governance structure• How are costs / liabilities / benefits to be shared?• Disputes• Exit / termination arrangements
  17. 17. Trading subsidiaries and trading agreementsWhy have a trading subsidiary?• Charity’s ability to trade is limited• Trading subsidiary is a separate legal entity – ring- fences risk / liability
  18. 18. Why have a trading agreement?• Impose contractual limitations on what TS can do• Terms on which TS can use charity’s assets• What happens to TS’s profit
  19. 19. Trading agreement – key issues• Scope of TS’s activities• Use of charity’s name and trade marks• Terms of use of other assets of charity e.g. website, premises, staff, equipment• Records• Gift of TS’s profit to the charity• Termination and effects
  20. 20. Thank YouCardiff Derby Nottingham
  21. 21. Contact Details Karen Collins DD : 029 2039 1707