The organisational structure of Cycling UK
Unlike most companies in the UK which are limited through the issue of shares, a company limited by guarantee only calls on its “shareholders” (known as “members”) to contribute if it ceases trading. Members are then called upon to contribute to meet the company’s debts up to the limit set out in its constitution. All Cycling UK members are “members” of the Cycling UK company. This means that all members are legally entitled to receive the Annual Report and Accounts , to attend and vote at the Annual General Meeting, and to contribute up to ten shillings if Cycling UK ceases trading and cannot meet its debts.
Cycling UK has also set up a number of trading subsidiaries. The two main subsidiaries are Cyclists’ Touring Club (Central) Limited and CTC Cycling Holidays and Tours Limited. Cyclists’ Touring Club (Central) Limited runs CTC’s events such as the Challenge Rides and CTC Cycling Holidays and Tours was set up to run CTC Tours as a properly bonded tour operator. There are two further subsidiary companies, Cyclists’ Touring Club (Sales) Limited and CTC Cycle Racing Limited. Both of these companies are “dormant”, which means they are not trading. All of these companies are limited liability companies with the whole share capital owned by CTC. Cyclists' Touring Club, is a company limited by guarantee, registered in England no. 25185, registered as a charity in England and Wales no.1147607 and in Scotland no. SC042541.
There are four further subsidiary companies, again limited liability companies with the whole share capital owned by CTC. They are Cyclists’ Touring Club (Eastern) Limited; Cyclists’ Touring Club (Northern) Limited; Cyclists’ Touring Club (Southern) Limited; and Cyclists’ Touring Club (Western) Limited. These four companies are “holding” companies for the CTC Member Groups and Regions. Having the Member Groups within these companies means that the they have the protection of limited liability, but are not constrained by some of the legal requirements that applies to CTC such as VAT. Because Member Groups operate very differently to the other companies in the CTC “group”, the accounts of the Member Group companies are consolidated (grouped together) separately in CTC’s accounts.
Some years ago, we established the Cyclists Defence Fund in response to the Darren Coombs case. The aim of the fund is to enable CTC to fight legal cases which may adversely affect all cyclists but which may not involve CTC members who are already covered under the CTC Legal Advice scheme. It was decided that it would be better to make the Cyclists Defence Fund a separate company so that it could be registered as a charity. This has now been done. The Cyclists Defence Fund is a company limited by guarantee like CTC, but the sole member of The Cyclists Defence Fund is CTC.
As a charity, the trustees are obliged to act only in the best interests of the charity, and cannot be directly instructed to do otherwise. This means that although it is the sole owner of the company, Cycling UK cannot instruct The Cyclists Defence Fund to take on a specific case, for example. Only the trustees can decide what the charity does. However, under company law, the sole membership does imply “control” in that CTC could appoint different trustees. This “control” requires the accounts of The Cyclists Defence Fund to be consolidated into the accounts of CTC along with its other subsidiaries.