Charity Trustees and Liability

Charity Trustee Liability InsuranceAbout corporate structures

Some charity structures are corporate bodies. If you choose a structure that forms a corporate body, the law considers your charity to be a person in the same way as an individual.

This gives your charity the legal capacity to do many things in its own name that a person can do, such as:

  • employing paid staff
  • delivering charitable services under contractual agreements
  • entering into commercial contracts in its own name
  • owning freehold or leasehold land or other property

If a charity structure is a corporate body, generally its trustees aren’t personally liable for what it does.

If your charity isn’t a corporate body (‘unincorporated’):

  • the trustees are personally liable for what it does
  • it won’t be able to enter into contracts or control some investments in its own name
  • two or more trustees, a corporate custodian trustee or the charities’ land holding service will have to ‘hold’ any land on your charity’s behalf

More information can be found here

Starting the New Financial Year on the Right Foot

Robust financial management is vital so charities can protect themselves against financial difficulties or abuse, and meet the needs of their beneficiaries.

There’s no better time than the start of the new financial year to assess your charity’s financial situation and financial controls, to see how you can improve them. Doing this is key to making sure that your trustees are able to protect the charity’s assets and resources.

The Charity Commission has recently updated their Charity finances: trustee essentials (CC25) guidance to help trustees and charity staff get to grips with the basic areas of financial management. It also links to more detailed guidance on a number of areas.

Setting Up a Charity

FundraiserThere are 6 steps to setting up a charity.

  1. Find trustees for your charity – you usually need at least 3.
  2. Make sure the charity has ‘charitable purposes for the public benefit’.
  3. Choose a name for your charity.
  4. Choose a structure for your charity.
  5. Create a ‘governing document’.
  6. Register as a charity if your annual income is over £5,000 or if you set up a charitable incorporated organisation (CIO).

More information can be found here

Charitable Incorporated Organiations – CIOs

http://www.taylorbracewell.co.uk/cms/img_articles/charities1.jpegThe Charitable Incorporated Organisation – CIO –  is a relatively new form of incorporated legal structure that is designed to meet the particular needs of a charity and is only available to charities.  A CIO is a corporate body which is not a company incorporated under the Companies Acts; it is therefore not subject to company regulation. Neither its existence nor any charges it creates have to be registered at Companies House.

The corporate structure provided by the CIO meets a demand from the charitable sector for a structure which gives a charity a legal personality of its own, enabling it to conduct business in its own name, rather than in the names of its trustees.

More information can be found on the Government website: https://www.gov.uk/guidance/charity-types-how-to-choose-a-structure

How to Recruit Trustees

We are often asked the question ‘How do we find trustees?’

Well, there is no need to struggle – just go to this website and you could have all your questions answered.

http://www.reachskills.org.uk/trusteeworks

TrusteeWorks introduces voluntary organisations to talented trustees with the right blend of skills and experience for free. 

The matching service is now absolutely free to organisations under £1M turnover

The website also gives you valuable guidance on preparing and information pack for prospective new trustees.

Charity Law and How if Affects Your Group

Are you a Trustee?  Are you in the know about the financial and legal responsibilities which accompany your role?

Our next Training Course can put you in the picture

Nick Meakin will join us on

Wednesday 4th February 2015

from 9:45am to 12:30pm

at the Bosnia & Herzegovina Centre, Derby DE1 1LN

to explain your responsibilities and highlight how you can minimise any personal financial risks