A ROW is simmering between Whitby Regatta and Whitby Town Council, which is demanding answers from the organisers of the event that has now become a limited company.
The council has asked the representatives of Whitby Regatta Ltd to attend an extraordinary meeting in August to answer a series of questions it has drafted.
They were put together at a meeting on Tuesday night, with Whitby Regatta placed on the agenda after questions and concerns were raised by members of the public.
They come after it emerged that Whitby Regatta formed as a company limited by guarantee on 5 July last year, listing seven directors – Mike Nightingale, Steve Greer, Rebecca Turton, Arthur Franklin, Ivor Greer, Jane Kenyon and Steven Thomas.
At the council meeting Coun Sean Rixham-Smith said: “Let’s discuss this and see what they have got to say - how this has come to this situation, how it has become a limited company and for what purpose, what’s going on, that is really what I want to know?”
Questions will include - why is Whitby Regatta a company and not a charity? Who made the decision? What consultation took place with the former regatta committee? What involvement it will have with future regattas? Were the rowing club and other groups associated with event consulted?
But Labour councillor Noreen Wilson said: “Do we have the right to ask these questions? Has there been any town council involvement before. What is to stop them telling us to go away?”
Town clerk, Pam Dobson said: “Because it is such a well known event the town council can ask these questions. They don’t have to answer but it is perfectly legitimate that we ask the questions.”
A date for a meeting to hear the answers hasn’t seen set but when the Whitby Gazette asked the company about the town council’s concerns it was given a full and frank response.
It said the company was formed following advice from a local solicitor and Company House – a step often taken by charities, community projects, clubs, societies and other similar bodies.
With it being a ‘not for profit company’ it means any profits are not distributed among company members but ploughed back into the future running of the event.
The main purpose of Whitby Regatta obtaining Limited status is to protect the voluntary organisers, who could otherwise be liable for any debts the Regatta may accrue.
This could mean they would be forced to pay out of their own pocket, which could have drastic financial consequences for the volunteers.
The full statement from Whitby Regatta Ltd reads:
“In 2011, following advice taken from a local solicitor and Company House, a committee decision was made to apply for the Whitby Regatta to become a ‘Company Limited by Guarantee.’ Companies limited by guarantee are widely used for charities, community projects, clubs, societies and other similar bodies. Most guarantee companies, as is the Whitby Regatta, are not-for-profit companies. In other words the Whitby Regatta does not distribute profits to members but retains them for maintaining the event in forthcoming years.
The main reason for the Whitby Regatta becoming a company limited by guarantee is to protect the people running it from personal liability for the company’s debts. Indeed funding bodies, such as local authorities, often insist on an organisation being registered as a company limited by guarantee. If a community project, club, etc. is not registered as a limited company, then the people running it can be made personally liable for its unpaid debts. To those volunteers who continue to serve the Whitby Regatta, this can be a real risk.
As the Whitby Regatta is limited by guarantee, there are no shareholders however, to meet the requirements of the Companies Act 2006, we must have at least one director. In this case we have several, all of whom have lodged their address with Company House and all of whom have given the agreed service address as that registered.Every director is required to provide both their usual residential address to Company House and, for each directorship, a service address. The service address will be on the public record; the residential address will be protected information. A director may choose to use his residential address as his service address; if this is the case the service address will still appear on the public record, but the fact that the two addresses are the same will be protected information.
As advised by Company House, directors may be given some other title, such as committee, management committee, board of managers, trustees, governors, etc.In addition they may, of course, set up sub-committees, etc. and delegate powers to them, and may give particular directors special responsibilities, such as treasurer, secretary, etc.Moreover, a not for profit company limited by guarantee can be exempted from having the word ‘Limited’ (or ‘Ltd’) at the end of its name.
As a not-for-profit organisation, all donations, collections and sponsorships given by members of the public and businesses are directed to the running of the Whitby Regatta. Any surplus monies are suitably invested to ensure the continuance of the Whitby Regatta in its present format. Without such prudence, having made a substantial financial loss in 2010 and 2011, the event may well have had to be curtailed in some way this year.As specified in its margins, should the Whitby Regatta fold, any surplus, after satisfying all debts, will be held in trust for a period of 2 years. Should no organisation take over the administration after that time, the surplus will be distributed between the local rowing clubs.
Turning to the particular role of Secretary, changes in April 2008 to the Companies Act 2006, now mean that UK limited companies no longer require a company secretary and allow a company to operate with a single director. In addition, since 1 October 2009, secretaries who are an individual person will be able to file a service address for the public record if necessary; hence our use of the P.O Box address quoted on the Whitby Regatta website.
The decision to become a Company Limited by Guarantee was taken in consultation with other members of the Whitby Regatta Committee including the Rowing Clubs. It was taken with the aim of protecting those volunteers serving the local community and not to benefit them. If it is considered that the Articles of Association require re-visiting, the Whitby Regatta will do so in conclusion with our solicitor, Companies House and the rowing clubs.”