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Why we registered as a Private Limited Company and encourage your social enterprise to do the same

As of today, 10/10/2017, Arab Millennial is registered as a UK Limited Company (11005715). Before doing this, we had to decide whether we should register our social enterprise as a charity or a company.

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Charity model

UK registered charities must have a designated Trustee who will scrutinise the organisation’s finances. Beyond a specified threshold of charitable ingoings, the charity then becomes subject to scrutiny from the UK Charity Commission. The commission can fine the charity if finances are being used irresponsibly.

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Company model

UK registered companies, on the other hand, do not require a Trustee. They require only one or more registered Directors. However, UK registered companies must file regular tax returns, and missing these deadlines can result in penalties. Beyond a certain specified income, the company becomes liable to paying corporation tax. If they do not pay appropriate tax returns, they can be fined.

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Why we choose the company approach

Arab Millennial operates as a social enterprise. We have the core value and vision of contributing to the progress and development of the global Arab diaspora in a positive way. As such, we rely on fundings to keep regular opinion pieces online and to maintain our website, not just from an aesthetic perspective, but also from political attacks and other security vulnerabilities.

Most successful websites receive 2,000 monthly visits in their first year. In our first year, we currently receive over 200,000 visits a month from 20,000 unique, genuine visitors.

Nonetheless, advertising revenue would still not be enough to maintain our website.

Generally, websites must be receiving millions of hits to make any significant revenue from advertising. We therefore rely on funding, and have also established an Arab Millennial Project Support initiative that allows us to help other conscientious initiatives reach a similar visibility, based on our proven track record, in return for retrospective commission from their monthly profits.

We generally encourage our partners to register as private limited companies, as donors, even charitable ones, like to see an organised framework in terms of what finances are required, where they are going, what impact they will have, and what the return of investment (ROI) will be. Framing your social enterprise as a business will give you a good framework for providing clarity and submitting a convincing grant applications to public and social organisations.

Written by 

Osama Filali Naji is a Co-Founder at Arab Millennial.

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