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The mere fact that a mutual concern is incorporated as a company does not destroy the element of mutuality¹, and consequential non-liability to tax but it may be more difficult to satisfy the requirement that surpluses should go back to the contributors in their role as contributors and not as shareholders.

This principle was established in South-West Lancashire Coal Owners' Association Ltd². The association was incorporated under the Companies Acts and was limited by guarantee. Its purpose was the indemnifying of only its members (who were all coal owners) against liability for workmen's compensation. The association's funds were built up from contributions by the members in proportion to the wages they paid. Calls were made upon the members for the payment of the company's liabilities for compensation and other expenses, and these calls formed a general fund.

Each year the surplus in that fund was transferred to a reserve fund to which extraordinary calls upon the members were also credited. The reserve fund was deemed to belong to the members in the proportions