Alan Robinson - Cross Keys Law Charities Act 2006 What’s in place

Cross Keys Law The Charities Act Highlights Legal definition of charity Charity Appeal Tribunal Registration and audit requirements Charitable Incorporated Organisations Relaxing of some regulatory requirements

Cross Keys Law New list of charitable purposes Prevention or relief of poverty Advancement of education Advancement of religion Advancement of health or saving of lives Advancement of citizenship or community development

Cross Keys Law New list of charitable purposes Advancement of arts, culture, heritage or science Advancement of amateur sport Advancement of human rights, conflict resolution or reconciliation, religious or racial harmony, equality or diversity Advancement of environmental protection or improvement

Cross Keys Law New list of charitable purposes Relief of those in need because of youth, age, ill-health, disability, financial hardship, other disadvantage Advancement of animal welfare Promotion of efficiency of armed services or emergency services Other purposes which have been accepted as charitable or are in future

Cross Keys Law Public Benefit Legally all charities must have purposes that benefit the public Relief of poverty or advancement of religion or education no longer deemed to benefit the public All charities must show that they are for the public benefit

Cross Keys Law Charity Appeal Tribunal Came into operation 18 March 2008 Right to appeal against most decisions of the Charity Commission

Cross Keys Law Registration from April 07 Compulsory registration with annual income of £5000 or more Voluntary registration below this figure No duty to register with permanent endowment Exempt charities with a principal regulator remain exempt – others register Excepted charities must register (interim threshold £100,000 income)

Cross Keys Law Audit and Examination Changes Charities with annual income of £500,000 or over or assets over £2.8m – audit. Charities with income of between £10,000 and £500,000 – independent examination unless governing document says audit. Income between £250,000 and £500,000 – i.e. or audit must be by qualified person

Cross Keys Law Charitable Incorporated Organisations At present – Existing charity wishing to incorporate must set up new organisation and register as a charity New organisation must set up as company and register as charity Must report to both CoHo and CC

Cross Keys Law Problems with existing format Companies are profit-making No explicit duty for members to act in interests of charity Unwieldy where directors and members the same, i.e. non-membership groups Legal uncertainty as to overlap between directors and trustees Problems with EU Directives

Cross Keys Law CIO proposals – 2009 Incorporated body, own legal identity Members liability limited ‘Foundation’ and ‘Membership’ formats Registration with Charity Commission Explicit duty on members and trustees to act in the interests of the CIO Power for charitable company to convert to a CIO by special resolution

Cross Keys Law Trustees General power to pay trustees subject to safeguards CC can relieve trustees of liability if they have acted ‘reasonably and in good faith’ Trustees can buy trustee indemnity insurance if in the best interests of the charity