1. Village Halls Trustee Responsibilities/Governance 14/01/2014

2. Ed Baker TDP Training Business and Social Enterprise Advisor

3. Agenda Responsibilities. Structures. Options. Benefits. Issues. Practical Implication.

4. What are Trustee Responsibilities? What laws are Charity Trustees exempt from? What areas within the law are Trustees responsible for? Does Trustee Insurance ensure that you will not be held Liable? When do Trustee responsibility stop?

5. In Short..... You are responsible for everything that happens

6. Trustee Must Know your rules; Constitution/ Mems and Arts Be clear on your Responsibilities Take professional advice where required Be involved in decisions -The LawGALS Understand being a volunteer

7. New Trustee All new Trustees must have an induction Read - The Essential Trustee Consider training and up skilling for individuals the board and staff - consider TDP Training

8. CIO Your governance is as important as companies with a turnover of £9Billion

9. Governance – Day to Day Will changing your legal structure improve the Day to Day? Will it improve the operation? Will the financials improve? Will staff or clients/customers see a difference? Why do it?

10. Governance / Structure Association Charity Charity + Company (Incorporated) NEW... CIO (Charitable Incorporated Organisation) Trading Arm

11. Finding the facts about Incorporation can be difficult! Why Incorporate

12. Why Incorporate? Discuss..... Risk; Contractual, Staff, Property, Contracts When the risk increases, incorporation is a safeguard

13. Governance Structure Your Stories

14. What are the options? Stay Unincorporated Convert to a Company Limited By Guarantee and a Charity Convert to the new legal format CIO a Charitable Incorporated Organisation

15. What Orgs will benefit CIO’s will be mostly be suitable for small to medium sized organisations which employ staff and/or enter into contracts. If your charity is likely to want to issue debentures, a company limited by guarantee will be a better option for you. Although establishing and running a CIO should be simpler than establishing a charitable company, it will not be as straightforward as running an unincorporated association/charitable trust.

16. What are the Benefits The CIO structure has several benefits over unincorporated structures, such as: Members and trustees are usually personally safeguarded from the financial liabilities the charity incurs, which is not normally the case for unincorporated charities The charity has a legal personality of its own, enabling it to conduct business in its own name, rather than the name of the trustees

17. The Advantages Limited Liability: so trustees and members will normally be protected from personal liability and would not be expected to make a contribution to any short fall if wound up, reducing the financial risk Separate legal personality, the CIO is the other party in any contracts Only need to file accounts and returns to CC. Up to £250,000 income only need simple receipts and payments accounts

18. Changes can seem far away Making the change to an incorporated body is not done lightly Planning is essential You must try to ensure that it does not hinder the Day to Day running

19. Model Constitution There are two standard models for CIOs; Foundation model Association model The key difference is that the Foundation model has all its members as Trustees and the Association model has voting members in addition to Trustees It is best to use the model constitution

20. The Process The process you will need to follow, in this order, is: Register the new CIO with us. Transfer the assets and undertakings of the unincorporated charity to the CIO and settle any liabilities. Dissolve the unincorporated charity in accordance with the provisions contained in its governing document. Apply to us to have the unincorporated charity removed from the register of charities

21. CIO Incorporation! The CIO will be a new legal entity and it will have a new registered charity number, so you will need to inform all interested parties; banks, funders, staff, HMRC, list of service providers, statutory bodies, auditors, registrar / licensing authorities and suppliers etc., of the transfer, ensuring that any existing contracts are assigned to the CIO. See CC information on incorporating a charity CC will not be registering debentures (as does companies house), it remains to be seen how banks view this.

22. Where to Find Help

23. Conclusion All trustees need to understand their responsibilities Have an induction process for new trustees Review your risks carefully with staff / trustees, take appropriate action Ensure that your insurance is sufficient and includes – legal cover Consider your current governance, is it “fit for purpose” Understand the risks of being unincorporated If incorporation is considered, plan the change and use the process as an opportunity to update and become “fit for purpose” CIO is the simplest option unless there are debentures, using the model constitutions Be involved with the decisions and their risks Ed Baker ed@edwardbaker.org.uk

24. Questions