Closing Down A Charitable Company

Related imageThe company must first of all be removed from the Companies Register but only if it:

  • hasn’t traded or sold off any stock in the last 3 months
  • hasn’t changed names in the last 3 months
  • isn’t threatened with liquidation
  • has no agreements with creditors, eg a Company Voluntary Arrangement (CVA)

A company can apply to the registrar to be struck off the register and dissolved if it’s no longer needed, for example if:

  • the directors wish to retire and there is no one to take over the running of the company
  • the company is a subsidiary whose name is no longer needed
  • the company was originally set up to exploit an idea that turned out not to be feasible

More details can be found here:

Once the company has been removed from the Companies House Register, it can be removed from the Register of Charities.

A charitable company has an automatic right to expend all of its assets on its purposes.

You can tell the Charity Commission that you have wound it up by completing the closure form. This can be done online – more details  can be found here:

Closing a Charity – The Law

charity_2232731kClosing a Charity – The Law

Charities can close for a number of reasons, such as:

  • a merger with another charity
  • the original purpose has been met or is no longer relevant, for example treating a disease that has since been eradicated in the area the charity serves
  • losing funds or funding
  • a lack of members
  • becoming a company or charitable incorporated organisation (CIO), which means creating a separate charity

If you do decide to close your charity, you’ll need to tell the Charity Commission if it is a Registered Charity, and clear all its debts and liabilities before you spend its remaining assets on your charity’s purposes. This will include checking if you have any:

  • unspent grant money – if so, check if there is any specific agreement with the grantmaker about what to do with it where you are closing the charity
  • money from fundraising appeals that haven’t reached their target – if so, check the commission’s guidance on failed appeals to see if you need to return any donations to donors

Further detailed guidance can be found here: https://www.gov.uk/guidance/how-to-close-a-charity