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Operating a new railway - group or company?

Electric

Joined: 11-01-18

Topics: 1

Replies: 2

Posted: Tue 29th May 2018, 12:27am
Operating a new railway - group or company?

I am part of a small group of people who are getting ready to build a new 7.25’’ passenger carrying railway at a garden centre. We already exist as a constituted group with assets, financial controls, and our insurers are happy to insure us to operate a railway in addition to our current insurance just as we are.

I understand it is normal for railways to be operated as Limited Companies, Community Interest Companies or Community Benefit Societies (a newer registration option with similar responsibilities to that of a limited company).

Our group doesn’t rent the land, and it doesn’t own it either, it is currently in a good position of hardly any responsibilities or overheads, making things much simpler.

Can anybody please share their experience or advice for setting up a new group?
Would it be acceptable to continue with, and operate a railway as our successful constituted group? – Or is it a requirement for railways to be operated by companies limited by guarantee?

Thanks for your help and advice.
 

Replies To This Post

Peter Beevers

Joined: 9-10-01

Topics: 4

Replies: 155

Posted: Tue 29th May 2018, 7:57am

There is no hard and fast requirement to form a company, however common sense says it's the best thing to do.
As a group, you are severally liable for any debt. As a company, your maximum exposure is £1 each. Now, imagine the worst: an accident the day after your insurance is due, and your secretary forgot to renew it - or the cheque bounced - or, really worst case, the insurance company won't pay because it says the accident was down to you not operating the railway in line with their guidelines. In any of those circumstances - unlikely though they may be - as a simple society, you all stand to lose your homes and anything else the baliffs can sell to pay compensation to the injured parties. Most clubs see that as an unacceptable risk, so form companies.
 

Electric

Joined: 11-01-18

Topics: 1

Replies: 2

Posted: Fri 1st Jun 2018, 10:25pm

Thanks Peter. That makes perfect sense. Even though you could have indemnities insurance for the club committee, it is always better to be safer than sorry, and potentially homeless too.
 
 
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