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