OTHER CHAPTERS
I. SETTING UP AN ORGANISATION
Ch.1: Trusts & unincorporated associations
Ch.2: Companies & other incorporated structures
Ch.3: Charitable status, charity law & regulation
Ch.4: The objects clause
Ch.6: Setting up an organisation
Ch.7: Registering as a charity
Ch.8: The organisation's name
Ch.9: Branches, subsidiaries, partnerships & mergers
II. GOVERNANCE & MEMBERSHIP
Ch.10: Members of the organisation
Ch.11: Members of the governing body
Ch.12: Officers, committees & sub-committees
Ch.13: Duties & powers of the governing body
Ch.14: Restrictions on expenses, remuneration & benefits
III. RUNNING AN ORGANISATION
Ch.15: The registered office and other premises
Ch.16: Paperwork requirements
Ch.17: Meetings & decision making
Ch.18: Legal agreements
Ch.19: Organisational & personal liability
Ch.20: Insurance
Ch.21: Financial difficulties & winding up
IV. EMPLOYEES, WORKERS, VOLUNTEERS & OTHER STAFF
Ch.22: Employees and other workers
Ch.23: Rights, duties & the contract of employment
Ch.24: Model contract of employment
Ch.25: Equal opportunities in employment
Ch.26: Taking on new employees
Ch.27: Pay & pensions
Ch.28: Working time & leave
Ch.29: Disciplinary matters, grievances & whistleblowing
Ch.30: Termination of employment
Ch.31: Redundancy
Ch.32: Employer-employee relations
Ch.33: Employment claims & settlement
Ch.34: Self-employed workers & other contractors
Ch.35: Volunteers
V. SERVICES & ACTIVITIES
Ch.36: Health & safety
Ch.37: Equal opportunities in provision of goods & services
Ch.38: Confidentiality, privacy, data protection & freedom of information
Ch.39: Intellectual property
Ch.40: Publications & publicity
Ch.41: Campaigning & political activities
Ch.42: Public gatherings & entertainment
Ch.43: Food & drink
VI. FUNDING & FUNDRAISING
Ch.44: Funding & fundraising: General rules
Ch.45: Fundraising activities
Ch.46: Tax-effective giving
Ch.47: Trading companies
Ch.48: Contracts & service agreements
VII. FINANCE
Ch.49: Financial procedures & records
Ch.50: Annual accounts, reports & returns
Ch.51: Auditors
Ch.52: Corporation tax, income tax & capital gains tax
Ch.53: Value added tax
Ch.54: Investment & reserves
Ch.55: Borrowing
VIII. PROPERTY
Ch.56: Land ownership & tenure
Ch.57: Acquiring & disposing of property
Ch.58: Business leases
Ch.59: Property management & the environment
IX. BACKGROUND TO THE LAW
Ch.60: How the law works
Ch.61: Dispute resolution & litigation
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UPDATED INFORMATION FOR CHAPTER 5:
VOLUNTARY SECTOR LEGAL HANDBOOK
This page contains information that has appeared on Sandy Adirondack's legal update website for voluntary organisations at www.sandy-a.co.uk/legal.htm. For current updates, including potential changes that are in the pipeline, see the legal update website.
These websites for each chapter update
the 2nd edition of The Voluntary Sector Legal Handbook by Sandy Adirondack and James Sinclair Taylor (Directory of Social Change, 2001). The websites are not intended as a comprehensive update and should not be treated as such.
To order a copy of The Voluntary Sector Legal Handbook, print out the order form at www.sandy-a.co.uk/bookserv.htm or send an email order by clicking
. It costs £50 for voluntary organisations or £80 for others, plus 10% p&p. We expect the third edition to be published in 2007.
The information here covers the law applicable to England and Wales. It may not apply in Northern Ireland and/or Scotland. These news items are not a full or definitive statement of the law and are not intended as a substitute for professional legal advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be taken by the author.
Chapter 5
THE GOVERNING DOCUMENT
THE CHARITIES ACT 2006
Updated 8/12/06.
The Office of the Third Sector announced on 5 December 2006 the proposed timetable for implementation of the Charities Act 2006. The Act, which received royal assent on 8 November 2006, will come into effect in stages over the next two years, with the first commencement order expected in early 2007, the second in the second half of 2007, and the third in early 2008.
The Act (in pdf format) is at www.opsi.gov.uk/acts/acts2006/ukpga_20060050_en.pdf, and in html format at www.opsi.gov.uk/acts/acts2006/20060050.htm.
Explanatory notes to the Act are at www.opsi.gov.uk/acts/en2006/2006en50.htm.
The Charity Commission's guide to the main provisions is at www.charitycommission.gov.uk/spr/ca2006prov.asp.
For the Office of the Third Sector's implementation timetable click here (the address is too long to show on screen).
The summary below lists some of the changes that may affect small and medium charities, with the expected implementation dates. It is not full summary of the Act and does not cover all provisions.
Charities Act 2006
AMENDING A CHARITABLE COMPANY'S MEMORANDUM AND ARTICES
Updated 26/4/09. This information is included in s.7.5.3 in The Russell-Cooke Voluntary Sector Legal Handbook (VSLH3).
From 18 March 2008 the Charities Act 1993 requirement to obtain prior Charity Commission consent for any change in the memorandum or articles of association "directing or restricting the manner in which the property of the company may be used or applied" no longer applies. Consent is required only for changes to the objects clause, changes relating to use of property when the company is dissolved, or changes relating to the provision of benefit to directors, members of the company or persons connected with them.
This provision is in s.31 of the Charities Act 2006, which amends s.64 of the Charities Act 1993. For links to the Acts and guidance, see The Charities Act 2006. Explanatory notes to the Act are at www.opsi.gov.uk/acts/en2006/2006en50.htm.
The Companies (Model Articles) Regulations 2008, at www.opsi.gov.uk/si/si2008/uksi_20083229_en_1 come into effect on 1 October 2009 and include model articles for a private company limited by guarantee. However these should not be used for charitable companies. Charitable companies which wish to amend the memorandum and articles now should take specialist legal advice or use the Charity Commission's model memorandum and articles at tinyurl.com/cvb5hn. Charitable companies that want their articles to fully reflect the October 2009 changes in company law should wait until the Charity Commission's and/or Charity Law Association's revised models are available.
Go back to Charities Act implementation timetable
Go back to contents
Go to archived items about governing documents (VSLH2 chapter 5)
Charities Act 2006
CY PRÈS PROVISIONS
Updated 22/3/08. This information updates ss.5.5.4 & 44.2.3 in The Voluntary Sector Legal Handbook 2nd edition.
From 18 March 2008, the rules relating to cy près schemes, when the Charity Commission or court authorises a charity's property to be used for purposes other those originally intended, are eased. Unless a donor makes a "relevant declaration" to the contrary at the time of donating money or property for a specific purpose or purposes, a charity will be able use the gift cy près if it cannot be used for the intended purpose(s).
Where a cy près scheme is made, the need for the new purpose(s) to be as close as possible to the original purpose(s) is no longer paramount. "The spirit of the gift" and the social and economic circumstances at the time of the proposed change must also be considered.
These provisions are in ss.15-18 of the Charities Act 2006, which amend ss.13-14 and insert new ss.14A-14B to the Charities Act 1993. For links to the Acts and guidance, see The Charities Act 2006.
Charities Act 2006
AMENDING AN UNINCORPORATED CHARITY'S GOVERNING DOCUMENT
Updated 22/3/08. This information updates s.5.5.5 in The Voluntary Sector Legal Handbook 2nd edition.
In an unincorporated charity of any size the constitutional provisions relating to the powers exercisable by the trustees in administering the charity, and provisions regulating the charity's administrative procedures, can from 27 February 2007 be amended, even if there is no amendment power in the governing document. If the charity is a membership body (with members distinct from the charity trustees) the amendment must be approved by a general meeting of the members. If the charity is not a membership body, the trustees can make the amendment.
Where the governing document contains amendment provisions, they must be followed.
From 18 March 2008, the trustees of an unincorporated charity with annual income no more than £10,000 and which does not hold land designated for specific purposes, may amend by a two-thirds majority the charity's purposes (objects). The new purposes must be charitable and must consist of or include purposes similar to the ones that are being replaced, and the trustees must be satisfied it is in the interests of the charity for the purposes to be changed. The trustees must send a copy of the resolution and their reasons for passing it to the Charity Commission.
These provisions are in ss.41-42 of the Charities Act 2006, which add new s.74C & s.74D to the Charities Act 1993. For links to the Acts and guidance, see The Charities Act 2006.
COMPANIES ACT 2006 CHANGES
For changes relating to company constitutions in the Companies Act 2006, see www.sandy-a.co.uk/vslh/02incorp.htm.
CHANGES IN INDUSTRIAL AND PROVIDENT SOCIETY LAW
Updated 26/10/05. This information updates ss.2.4, 4.7.2, 5.4.18 and 16.1.2 in The Voluntary Sector Legal Handbook 2nd edition.
The Co-operatives and Community Benefit Societies Act 2003 has changed industrial and provident society law to bring it more into line with company law. From 1 April 2004 the very strict I&PS rules voiding (invalidating) all acts outside the I&PS's or committee's powers were eased. From the same date, where the name of a charitable I&PS does not include the word "charity", "charitable" or the Welsh equivalents, the fact that it is charitable must be stated on business letters, notices, advertisements, cheques, orders, invoices, receipts etc. From 20 October 2003 I&PSs no longer need to have a seal.
When the appropriate regulations are agreed--expected to take effect from 1 December 2005--it will be possible for non-charitable community benefit societies to "lock in" assets so they cannot be distributed to members, but must always be used for the benefit of the community. (Charitable community benefit societies are already subject to an asset lock under charity law, as are community interest companies.)
The Act is at www.opsi.gov.uk/acts/acts2003/20030015.htm, and explanatory notes are at www.opsi.gov.uk/acts/en2003/2003en15.htm.
AMENDING THE GOVERNING DOCUMENT OF SMALL CHARITIES
Updated 29/12/03. This paragraph adds to s.5.5 in The Voluntary Sector Legal Handbook 2nd edition.
The Charity Commission's small charity pages now include guidance for unincorporated charities with annual income under £5,000 which wish to amend their constitution or trust deed, transfer property or spend capital, and declarations for unincorporated charities under £10,000 which have amended their governing document or wound up. The links are at www.charitycommission.gov.uk/supportingcharities/sculist.asp..
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