Written by Designed by Freepik
Below we summarise the key changes that came into effect in March:
Changes to Governing Documents
Charity Trustees of unincorporated charities (i.e. trusts and unincorporated associations) have been granted new statutory powers to amend their governing documents [s.280A Charities Act 2011]. Now charity trustees can amend their governing documents by passing a trustee resolution with a 75% majority. If the charity has a wider membership, a members resolution passed by a 75% majority is required in addition to a trustee resolution passed by a simple majority.
If charity trustees wish to make a “regulated alteration” (e.g. change of name, change of objects etc) to their governing document, the Commission’s consent will be required in the same way it is for charitable companies and CIOs. Any regulated alteration will only become effective upon registration by the Commission.
The Charity Commission are now obliged to apply a new statutory test when considering any application to amend a charity’s objects. The new statutory test requires the Commission to have regard to:
- The existing objects of the charity;
- The desirability for new objects (so far as seasonably practicable) to be similar to the existing objects of the charity; and
- The need for the charity to have suitable and effective objects, in light of current social and economic circumstances.
Disposals of Land
Dispositions of charity land made by a liquidator, receiver, mortgagee or administrator are now exempt from the usual Charities Act 2011 disposal rules.
Charity trustees are no longer required to certify compliance with the Charities Act 2011 when disposing of charity land. Instead, statutory statements are required to be included in both contract and transfer documents.
The Charities Act 2022 seeks to clarify that transfers to another charity, which further the objects of the transferring charity, are exempt from the usual Charities Act 2011 disposal rules. However, transfers to another charity for financial gain (or social investment) will still be covered by the usual disposal rules.
Charity Mergers
New provisions implemented by the Charities Act 2022 will enable more gifts made to a former charity which has merged with another charity to have effect as if it were a gift to the new charity.
Charity Commission Powers
The Charities Act 2022 has also granted the Commission new powers to authorise trustee payments for work performed for the charity in situations where withholding such a payment would be inequitable. The Commission is also now authorised to confirm defective or potentially defective trustee appointments and the decisions made by such a trustee.
The Commission’s powers to require public notice of changes to a charity has been broadened to include changes to a governing document as well as orders made by the Commission. The requirement for public notice is at the Commission’s discretion.
If you have any queries about how these changes might affect your charity please feel free to contact our Church and Charities team at PWW who would be happy to answer any queries you might have.