Limited Company

Ah yes, the one that's been going on for at least fifteen years to my certain knowledge.

What's it about?

From the organisers' perspective

As a 'unincorporated' group of individuals, the organisers are jointly and severally liable for the debts they incur. Or put another way, they each owe all of any loss.

And, to make it even more fun, unless they do some careful planning, should they make a profit, then they are almost certainly liable to pay tax on the 'income'.

From the community's perspective

Since the arguments started, we've now built up a healthy surplus and it would be a shame if that vanished unnecessarily.

Limited Companies

The basic solution to the organisers' problems is to form a limited liability company. Unless they behave particularly naughtily, this protects the organisers' individual assets from the failings of their joint enterprise.

By going for a company limited by guarantee rather than by shares, you can easily have a community-based and accountable body. Lots of community organisations have this structure.

The drawback is that with the benefits of limited company status comes a small pile of statutory responsibilities. You have to form (or buy) a company, arrange for a physical location to be its Registered Office, maintain various documents in order, have regular meetings, keep Companies House informed on various matters, give it a set of acceptable accounts... and pay money for the privilege.

So it's perhaps not surprising that in practice, only two years (UKBiHistory/BiCon2000 and UKBiHistory2006) have gone down this route.

Everyone else has been lucky

Sometimes very lucky! They've broken even, or not come to the attention of the Inland Revenue if they've made a profit, or they managed to avoid being chased for the losses, in some cases because there was enough money in the surplus to cover them.

But what about the workers.. erm community?

One thing that having a company running BiCon does not do is protect any surplus. If 'Team A Ltd' has all of BiCon's assets, it can be pursued for the lot by creditors.

Close...

At UKBiHistory/BiCon2002, a session was set up to discuss this issue again.

Organisers from several years attended, plus someone who had not thought about some of the issues much before and was very useful in a 'Dr Who's assistant' sort of role (explaining what's obvious to one person what isn't obvious to everyone!)

By the end of a fascinating discussion, which revealed even more near disasters than I had previously known about, everyone present at that session - ie a large proportion of the people it primarily affects - agreed the following was the best way forward:

An overall BiCon company, limited by guarantee with a wide membership, would be set up to hold BiCon's assets (primarily, the money!)
That company would have nothing to do with organising BiCon in any year, but would fund whoever who had got the mandate to do so to the extent necessary
Individual BiCon organisers are left free to organise their status as they see fit. If they want to have their year run by a company, fine. If not, fine

So... imagine that the overall company is called Secret Masters of BiCon, or SMoB for short. How does it work?

Team A runs BiCon one year. It needs Łx before the event to run it, which SMoB provides as a loan, and...

BiCon makes a profit. Team A hands back Łx plus the profit to SMoB. Everyone is happy.
BiCon makes a small loss, and SMoB is the only one owed money. Team A hands back Łx minus the loss. Everyone is happy.
BiCon makes a big loss. If Team A chose a limited company to organise their year, company law means they are personally protected from the loss (unless they've been very naughty!) In any case, SMoB becomes a creditor along with the others. It may get some of the money back or it may not, but SMoB's remaining money is safe.

Or looking at a specific example...

Too late to budget for it, the venue put in an completely unexpected large bill

Without SMoB: BiCon surplus would be taken to pay the venue

With SMoB: Any surplus is safe - SMoB has the assets, but not the liabilities

Either way, whether the organisers are safe depends on the size of the loss and on their decision to have a company or not.

This has happened at least twice. At the time of UKBiHistory/BiCon14, there was no surplus, and the organisers ended up writing a cheque to the venue saying 'this is all there is, please accept it as full payment'. Fortunately for them, it did.

When it happened again, to UKBiHistory/BiCon2001, there was a surplus and the venue ended up taking over Ł2,000 of our money that they didn't deserve. (Bastards!)

UKBiHistory/BiCon13 were also threatened with this one, but in the end escaped.

... but not close enough

All this was agreed by the people who it mostly directly affects and an amendment to the BiConGuidelines was drawn up for the DecisionMakingPlenary the following day.

Unfortunately, this is an admittedly complicated issue, not readily explainable in the minute or so available at a DecisionMakingPlenary of people who have never really thought about the issue.

The amendment was rejected.

Fortunately the BiConGuidelines are flexible enough to allow a partial solution to the problem of protecting the surplus - the organisers of UKBiHistory/BiCon2002 split it in two and handed half to the team doing UKBiHistory/BiCon2003 and half to the team doing UKBiHistory/BiCon2004.

But it really should be recognised that this is a bodge - it still left over Ł5,250 of the community's money at risk in 2003, and when no-one had volunteered to run UKBiHistory/BiCon2005 by the end of UKBiHistory/BiCon2003, all the money ended up in one place again, in the hands of the UKBiHistory/BiCon2004 team.

My personal suggestion is that we - past, present and future BiCon organisers - should Just Do It and set up SMoB (under whatever name is chosen).

The Good News

Managing a small company is now easier than ever. Whole swathes of paperwork and expenses have been done away with over the years. For example, a 'BiCon size' company need only submit three lines of accounts: money in, money out, and the difference. They don't even need to be audited - the idea is that if your members / shareholders are happy with that, Companies House should be too.

Ian

LimitedCompany