BIM24760 - Meaning of trade: mutual trading and members clubs: mutual associations: specific activities: Chambers of Commerce: a mutual trade?

The essential features for a trade to be mutual trade are set out at BIM24020.

There is no relaxation of this criteria in the case of Chambers of Commerce. You should apply the tests in exactly the same way as you would to an entity carrying on any other activity. In particular you should ensure that any surplus must go back to the contributors and to no one else.

It is usual for UK Chambers of Commerce to be constituted under rules that prohibit the payment or transfer of any part of their income or property to persons who have at any time been members. This rule means that any trade carried on by such a Chamber could not be a mutual trade. The essence of mutuality is that, sooner or later, those who contribute to a surplus must be entitled to receive back a fair proportion of any surplus. Rules and constitutions that specifically prohibit the distribution of surpluses in a winding-up mean that the conditions for mutual trading cannot be satisfied.

The Chamber’s rules and constitution should specify what happens to any surplus on a dissolution/winding-up and if that surplus is not to be returned to the contributors then it will not be carrying on a mutual trade.