The Regulator for Charities in England and Wales
(Version April 2008)
We are delighted that you want to play an active part in a charity. This guidance is about some of the issues that you may want to consider if the charity is in England or Wales. It covers:
This guidance reflects the definition of 'charity' set out in the Charities Act 2006.
The following terms are used throughout this guidance, and should be interpreted as having the specific meanings given below:
The Charities Act means the Charities Act 1993, as amended by the Charities Act 2006.
Aims: in this guidance we use this term to mean the purposes of an individual organisation. It is important to be able to distinguish clearly between an individual organisation's purposes and charitable purposes in general. We have therefore used the term 'aims' as shorthand for the purposes of an individual charity or organisation applying for registration as a charity.
Beneficiaries means the people (or in some cases, organisations) which the charity's aims are intended to benefit. The charity's governing document usually explains who the beneficiaries are.
Breach of trust means acting in a way which is inconsistent with the powers and duties of the trustee, whether those powers and duties are set out in the charity's governing document, or are part of general law.
Central Register means the place, at each of our offices, where you can view the Register.
Governing document means any document that sets out a charity's aims and, usually, how it is to be run. It may be a trust deed, constitution,articles of association, Scheme of the Commission, Royal Charter, conveyance, will or other formal document.
Objects: an organisation's aims (or purposes) are usually expressed in the 'objects clause' of its governing document. However, not all charities have a governing document with an objects clause, and sometimes the objects clause does not adequately or fully express the organisation's aims. There is therefore a distinction between an organisation's aims and the words that appear in its objects clause.
Paying includes not only payment in money, but also benefits in kind, such as free (or subsidised) accommodation or the provision of a car.
Promoters are people intending to set up (establish) a charity - if the charity is registered then they may become its first trustees.
Property means land, buildings, cash, investments or any other possession, which are owned by the charity.
Public benefit reporting requirement: this means the requirement for charity trustees to report in their trustees' Annual Report on their charity's public benefit.
Statutory guidance on public benefit: this is the guidance on public benefit that the Charity Commission has produced under section 4 of the Charities Act.
The Register means the computerised public Register of Charities in England and Wales.
Trustees means charity trustees. You are a charity trustee if you are:
As a charity trustee you are responsible for the general control and management of the charity. Because of this you may be known as a 'managing trustee'. There are two other types of trustees that you may hear about or wish to have: 'holding' trustees and 'custodian' trustees. These types of trustees have particular functions, which are described below, and they must always act on the lawful instructions of the managing trustees.
Custodian trustee means a corporation (not individuals) whose main function is to hold the legal title to investments and property on behalf of the charity. Custodian trustees can act only on the lawful instruction of the charity or managing trustees. A custodian trustee is a form of holding trustee but it has specific responsibilities as set out in section 4 of the Public Trustee Act 1906: it does not have any powers of management.
Holding trustee means a person, corporation or individual who holds legal title to a charity's property on its behalf. The name of the holding trustee is shown on the land register or company stock register as the person holding the legal title to land or shares belonging to the charity. The charity's governing document may confer additional powers and responsibilities on the holding trustee(s), but holding the legal title to the charity's property is usually all they do. Provided that holding trustees act only on the lawful instructions of the managing trustees they will not be held responsible for any action (or lack of action) of the managing trustees.
Must or need to are used to refer to actions that trustees, or their agents or employees, have to take by law.
Where we use terms such as the trustees should or we suggest, recommend or advise we are referring to actions which the trustees, their agents or employees could take and which we consider to be good practice, but which are not legal requirements.
1. Many people assume that they must set up a new charity if they want to carry out voluntary work. However, this is not always correct. Before setting up a new charity, please read our guidance Things to think about before starting a charity. This will help you to evaluate whether starting a new charity is the best way to proceed.
3. In this guidance we refer to an individual charity's purposes as its 'aims'. A charity's aims are usually expressed in the objects clause of its governing document.
4. 'Charitable purposes' are those that fall within the descriptions of purposes capable of being charitable set out in the Charities Act 2006 and that are for the public benefit. Purposes capable of being charitable include those purposes that the law previously recognised as charitable, as well as new purposes which may be recognised as the law develops.
5. The Charities Act 2006 sets out the following descriptions of purposes:
a. the prevention or relief of poverty;
b. the advancement of education;
c. the advancement of religion;
d. the advancement of health or the saving of lives;
e. the advancement of citizenship or community development;
f. the advancement of the arts, culture, heritage or science;
g. the advancement of amateur sport;
h. the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;
i. the advancement of environmental protection or improvement;
j. the relief of those in need, by reason of youth, age, ill-health, disability, financial hardship or other disadvantages;
k. the advancement of animal welfare;
l. the promotion of the efficiency of the armed forces of the Crown or of the police, fire and rescue services or ambulance services;
m. other purposes recognised as charitable under the existing law and any new purposes which are similar to another prescribed purpose.
6. Our web guidance Commentary on the Descriptions of Charitable Purposes in the Charities Act 2006 provides further information about what each of these purposes covers.
7. 'Public benefit' is the legal requirement that every organisation set up for one or more charitable aims must be able to demonstrate that its aims are for the public benefit if it is to be recognised, and registered, as a charity in England and Wales. This is known as 'the public benefit requirement'.
8. The public benefit requirement means that, to be a charity, an organisation must be able to demonstrate that it is set up for aims that are capable of being charitable, and that its aims are, and will be, carried out for the public benefit. It is a requirement that applies to each of an organisation's aims. A charity cannot have some aims that are for the public benefit and some that are not.
9. There are two key principles both of which must be met in order to show that an organisation's aims are for the public benefit. Within each principle there are some important factors that must be considered in all cases. These are:
Principle 1: There must be an identifiable benefit or benefits
1a It must be clear what the benefits are
1b The benefits must be related to the aims
1c Benefits must be balanced against any detriment or harm
Principle 2: Benefit must be to the public, or a section of the public
2a The beneficiaries must be appropriate to the aims
2b Where benefit is to a section of the public, the opportunity to benefit must not be unreasonably restricted:
2c People in poverty must not be excluded from the opportunity to benefit
2d Any private benefits must be incidental
10. Under the Charities Act 2006, the Charity Commission is required to issue guidance on public benefit. Our statutory guidance on public benefit is contained in our publication Charities and Public Benefit. In addition, we have issued supplementary guidance on the public benefit of specific types of charity.
11. Anyone thinking of setting up and registering a new charity should familiarise themselves with our statutory guidance on public benefit.
12. Charity trustees have the following public benefit duties to:
13. Anyone applying to register their organisation as a charity needs to be aware that the charity trustees must be aware of, and fulfil, their statutory duties with regard to public benefit and public benefit reporting. The need to meet the public benefit requirement is a continuing duty for charity trustees throughout the life of the charity; it is not just a requirement at registration.
14. When considering whether an organisation's aims are for the public benefit, we may consider its activities in order to:
15. In the case of an organisation applying to register as a charity, we can consider relevant factual background information, such as asking for evidence of its activities, or proposed activities, in order to decide whether or not its aims are charitable for the public benefit. Where possible we will use the information an organisation provides on its application form to help us decide if its aims are charitable and are for the public benefit. Where it is not clear that the aims are (and will be carried out for) the public benefit, we will ask the organisation to provide further evidence where necessary. Where we are not satisfied that the public benefit requirement will be met, we may refuse registration, or we may ask the applicant to amend their organisation's objects or activities to ensure it will meet the public benefit requirement before we can proceed with registration.
16. In general, aims are not charitable if they are mainly for the benefit of a named person or specific individuals. They will also not be charitable if the people who will benefit from them are defined by a personal or contractual relationship with each other. For example, if the beneficiaries are related or connected to the person who is setting up the charity, or where they are defined by common employment or by membership of a non-charitable body, for example, members of a professional institute.
17. An exception to this general rule exists in the case of the prevention or relief of poverty, where the people to benefit can come from a more restricted group, such as people having the same employer.
18. No organisation can be charitable if:
19. The following are examples of organisations or aims which are often assumed to be charitable, but in fact are not:
20. Fundraising is not a charitable object in itself: it is simply an activity which can be undertaken to help achieve a charitable purpose. If a charity wants to raise money to carry out work which is not covered by the existing objects of the charity, it can create a new charity with specific aims. Please contact us if you have any doubts about whether your proposed fundraising aims are authorised by the objects of your charity.
21. There are complex rules about fundraising and you may need to take professional advice on this. We offer advice in Charities and Fundraising (CC20). We recommend you read this and consider the following points of good practice.
22. We advise that particular care is taken over an appeal to help the victims of a disaster (or their families) where the beneficiaries may be a relatively small number of people. Disaster appeals are not always charitable. A charity cannot be created if it is intended that specific people will have the right to assistance whether or not they are in actual need, or that the benefits are only for particular private individuals. Where a charitable disaster appeal fund is set up, people will only be allowed to benefit on the basis of their proven need.
23. We appreciate that decisions on disaster appeals normally need to be taken very quickly. We suggest that promoters should consult us at an early stage before launching such an appeal. The Attorney General has issued guidelines about disaster appeals which are available from us (Disaster Appeals: Attorney General's Guidelines (CC40)). HM Revenue and Customs have also issued guidance called Guidelines on the Tax Treatment of Appeal Funds, which is available on their website www.hmrc.gov.uk or from them at the address given at the end of this guidance.
24. The main advantages are that charities:
25. There are restrictions on what charities can do, both in terms of the types of work they do, and the ways in which they can operate:
26. Setting up a new charity does not need to be a complicated process. However all organisations need a name, money, people and clearly set out ways of operating. As a minimum you will need to consider the following questions:
We have set out some guidance below to help you answer these.
27. The name of a charity is important. It is the name, rather than the charity registration number, that members of the public remember most about a charity. It is the charity's name that appears on its appeal literature and collecting tins. It is therefore important that charity names are sufficiently different to avoid confusion, and do not mislead members of the public in any way. Section 6 of the 1993 Act gives us powers to make a charity change its name in certain circumstances.
28. A charity name must not include a word or expression which might cause offence. This would not be in the interests of a charity or the charitable sector as a whole. In some cases, such names might not be allowed by law.
29. Before we register a new charity, we will compare the proposed name with those already on the Register to see if there are any identical or similar names. If the proposed name is the same as, or too similar to, a name which has already been registered, we will decide whether the proposed name is acceptable for use again. Where it is not acceptable we will ask you to change the name. Whilst we cannot insist that a name is changed before registration takes place, we do have a power to order a name change once a charity is registered.
30. We strongly advise that, before setting up a new charity and executing a governing document, you carry out your own checks regarding the availability of names. You can do this either by viewing the Register on our website, or by telephoning Charity Commission Direct on 0845 300 0218.
31. Entering a name on the Register does not give the charity which uses it any rights to the name under general law. Nor can we guarantee the use of a particular name, even if at the time of enquiry, there appeared to us to be no objection to the use of that name. This is because we may not know of all names used by unregistered charities, or of names which may be legally protected by another charitable or non-charitable body.
32. Please note that the entering of a name on the Register does not prevent us from subsequently directing that the name be changed. We will not be responsible for any costs incurred directly or indirectly by the charity as a result of any subsequent direction to change a name.
33. We cannot suggest names for charities.
34. If a company wants to use the words 'charity', 'charitable', 'charities', 'charity's' or 'charities' in its title or any compound word which includes these, it requires approval from the Secretary of State for Business, Enterprise and Regulatory Reform before a Certificate of Incorporation can be issued. Prior to giving approval, Companies House will need to see a letter from us confirming whether or not we have an objection to the use of these words in that organisation's title. If your company wishes to use one of these words in its name you should make a formal request to us and at the same time apply for registration. We will then consider both requests at the same time.
35. The funding available to the charitable sector is limited. Any new charity may find it more difficult to get funding because local authorities, the public and organisations who give money to charities may prefer to continue to give to charities with a proven track record, rather than a new charity. Our guidance Charities and Fundraising (CC20) gives more information about this.
36. There are more than 190,000 registered charities, working throughout the UK and overseas, which undertake an extremely wide range of work. It is very likely that a charity already exists which is doing the kind of work which you would like to carry out, and there may be one working in your area of the country. We suggest that you think about whether it would be better to offer your services to, or combine with, an existing charity. It is usually less effective to have several organisations trying to carry out the same work in the same place, and it duplicates running costs.
37. If you wish to commemorate someone close to you, it may be possible to create a separate named fund within an existing charity: this may be just as effective as creating a new charity.
38. If you would like to look for charities in your area, you can find them on the Register on our website, or you can telephone Charity Commission Direct on 0845 300 0218.
39. These are the people who are responsible for "the general control and management of the administration of a charity" (s.97 of the 1993 Act). This is a legal definition of those people who will run and be responsible for the charity. When you set up a charity you need to think carefully about who the first trustees will be.
40. All charities must have a clearly identifiable body of trustees, but they are often called various names depending upon what type of governing document the charity has. Some examples are in the following table:
|
Type of governing document |
Charity trustees will usually be called |
|
Constitution or Rules |
Executive or management committee members |
|
Trust deed |
Trustees |
|
Articles of association |
Board, council of management or directors |
41. Whatever the trustees are actually called, their responsibilities as trustees are the same. The directors of charitable companies also have responsibilities under company law. The duties and responsibilities of a charity trustee are wide ranging and need to be taken seriously. Anyone who wants to be a trustee needs to be prepared to give the necessary time and effort to understanding and carrying out those responsibilities. Our guidance The Essential Trustee: What you need to know (CC3) sets these out.
42. It is a general legal principle that those who run the charity (the trustees) should not financially benefit from it, unless they are specifically authorised to do so either by the charity's governing document or by us. Trustees must avoid being placed in a position where their duties as a trustee conflict with their own personal interests. However, this legal principle does not prevent the charity trustees of a community charity (eg a temple) from enjoying the benefits of that charity as a member of their community. If you are in doubt as to whether this may apply to your charity please see our guidance Users on Board: Beneficiaries who become trustees (CC24).
43. We have issued a range of guidance for trustees (or those who are thinking of becoming a trustee), for example Trustee expenses and payments (CC11) and Finding new trustees: What charities need to know (CC30).
44. No-one under the age of 18 can be appointed as a trustee unless the charity is a registered company. The minimum age for company directors is 16 years (although the Secretary of State can make regulations providing for exceptions to this). Some people are disqualified by law from acting as charity trustees, including anyone described in section 72(1) of the Charities Act 1993. Broadly that covers:
45. It is an offence to act as a charity trustee while disqualified unless we have given a waiver. In addition to the disqualifications detailed in section 72(1) of the 1993 Act, which apply to all types of charities, the Criminal Justice and Court Services Act 2000 disqualifies certain individuals from holding a range of positions in children's charities as defined in section 36 of that Act. This includes charity trusteeship. We do not have the authority to grant a waiver for this type of disqualification.
46. Trustees need to be able and willing to give time to the efficient administration of the charity and the fulfilment of its trusts. We recommend that they be selected on the basis of their relevant experience and skills and need to be prepared to take an active part in the running of the charity. They ought not to be appointed for their status or position in the community alone; this is the function of patrons.
47. We believe that diversity across the trustee body is an important factor for accountability. Selecting trustees from a range of social and economic backgrounds is a good way of achieving this. More guidance is given in Finding new trustees: What charities need to know (CC30).
48. Trustees need to follow certain guiding principles:
49. In matters of doubt, trustees should seek their own professional advice.
50. We believe that it is important that organisations working with children and vulnerable adults have a suitable child or vulnerable adults protection policy. If you apply to register your charity and plan to work with children or vulnerable adults you will be asked to supply us with a copy of your protection policy. Charities working with children or vulnerable adults may also be required by law to make the appropriate checks on trustees and/or employees with the Criminal Records Bureau. Further information on which charities should seek CRB disclosures for their trustees can be found in Finding new trustees: what charities need to know (CC30).
51. If trustees act prudently, lawfully and in accordance with their governing document then any liabilities they incur as trustees can be met out of the charity's resources. But if they act otherwise they may be in breach of trust and liable to meet any liabilities of the charity which are a consequence of their own actions, or to make good any loss to the charity. Since trustees must act jointly in administering a charity, they will also be responsible jointly to meet any liability incurred by them or on their behalf. We are able to take proceedings in court for the recovery, from trustees personally, of funds lost to a charity as a result of a breach of trust by the trustees.
52. If trustees enter into contracts in the course of administering the charity, and as a result incur liabilities or debts which amount in total to more than the value of the charity's assets they may be sued personally for the difference by the charity's creditors. We strongly recommend that trustees be particularly careful when entering into substantial contracts or borrowings to ensure that the charity has the means to meet its obligations. If your organisation is likely to be entering into contracts to provide services, or plans to directly employ staff, you should consider using the company format. Annex A gives further information.
53. All charities need a governing document. The governing document sets out how the charity's income can be spent, how the trustees are appointed and how the charity will operate.
54. There are three main types of governing document, and the type you choose will determine the type of organisation the charity will be. The three main types of governing document are:
55. Brief guidance is given in Annex A on these types of governing document. If you require information in greater detail, please refer to Choosing and Preparing a Governing Document (CC22).
56. We produce model forms of these types of governing document:
57. Our models contain administrative provisions that are suitable for each of these types of organisation. However, it is still necessary for anyone using those models to insert the objects of the organisation, complete blank spaces left in certain clauses and select some clauses where options are available. Copies of these models are available from each of our offices, free of charge, or from our website.
58. The Charity Law Association (CLA) also produce suitable model governing documents, for which a charge is made. To order copies of the CLA governing documents please e-mail the CLA administrator.
59. We have published some example objects which, if suitable, can be included in a governing document, particularly a model governing document.
60. Some large national charities produce an approved governing document that can be used by organisations associated with that charity. These approved governing documents contain both agreed objects and administrative provisions that are specific to a particular type of organisation. A list of organisations for which an approved governing document has been agreed can be found on our website.
61. We are the Charity Commission for England and Wales. We cannot register organisations set up under the laws of a foreign country, or in Scotland, Northern Ireland, the Isle of Man, or the Channel Islands. Whether we can register the organisation therefore depends on whether the law which applies to the organisation is that of England and Wales. For companies this normally means that they must themselves be registered in England and Wales. In other cases if the governing document itself does not make this clear, the law which applies will be that of the country with which the organisation has its closest connection. This will depend on the extent to which:
62. We will give advice where there is any doubt about the registration of such an organisation.
63. The minimum requirement for registration is that a charity must have an income of more than £5000 a year.
64. Organisations with an annual income not exceeding £5000 from all sources will be able to seek voluntary registration when the part of the Charities Act 2006 that permits this comes into effect. We will publicise this before it happens. Until then the Commission's priority is to complete the programme of registering previously excepted and exempt charities: we are not required to register a prospective charity that cannot demonstrate that it has already achieved the minimum income.
65. We will only consider an application for registration from an organisation below the minimum income in exceptional circumstances. Examples of when we might do this are:
66. We will not consider an application simply because the trustees think they will have difficulty in attracting funding without a registered charity number. There are other ways in which the organisation can establish its credibility. For example, for small charities HMRC will assess whether tax relief can be given. An HMRC number will provide the evidence of charitable status. Alternatively you may wish to set up a named account with an existing charity until you have achieved the required level of income.
67. If your organisation has less than the minimum income do NOT submit an application until you have checked that we are prepared to consider this. You can email the Registration Unit or write to Charity Commission Direct explaining why you think we should look at your application.
68. If you submit an application, and do not have either:
your application will be sent back to you to hold until such time as the charity has an income of more than £5000.
69. For evidence of income we normally require one of the following:
70. If you do not have an HMRC reference number then banks may not allow you to open a tax free account. However, you should still be able to open a treasurer's account. This can be converted into a tax free account when and if you become a registered charity or can show that HMRC have recognised the organisation's charitable status.
71. An organisation must register with us if it fulfils both the requirements for charitable status (see paragraph 2) and the minimum requirement for registration (see paragraph 63).
72. Most charities will meet both sets of criteria described above and must register. However, some charities, called exempt charities, have not been able to register, and have not been subject to our supervisory powers. These charities (listed in Schedule 2 of the 1993 Act) include some educational institutions, and most universities and national museums. More detail on exempt charities may be found in Operational Guidance OG57, written primarily for our staff and available on our website, as well as our other website guidance. However, in due course, all currently exempt charities will either have a principal regulator or will lose their exemption and therefore have to register with the Charity Commission. (Principal regulators are existing regulatory bodies that take on additional responsibility for monitoring charity law compliance.) This new framework will be phased in for different groups of exempt charities. Initially, exempt charities with no suitable principle regulator will have to register with the Commission if their annual income exceeds £100,000 (an interim threshold that will be reviewed in 2011).
73. Some other charities are excepted from the need to register, although (in contrast with exempt charities) they are still subject to the other provisions of the 1993 Act, and our supervision. These charities have been specifically excepted from the requirement to register by legislation or by a Commission Order. The underpinning excepting regulations have been extended until 2012. However, excepted charities with an income over £100,000 have a duty to register with us.
74. In exceptional circumstances, we will consider registering, on a voluntary basis, a charity which is excepted from the need to register. The applicant will need to persuade us that there is some compelling reason to do this. As a general rule we are working with umbrella bodies that have oversight of groups of excepted charities. This work will mean that we have agreed procedures in place and approved governing documents (for example for the different types of churches) when registration is required. Most of the national bodies do not want the local branches of their organisations to come to us independently in advance of this.
75. To register a charity, you will need to use the pack containing the application for registration and trustee declaration (which are available in English and Welsh). These can be downloaded from our website. Only ask for the pack if, having read this guidance, you believe that:
76. You should make an application only after you have formally adopted a governing document. The tables in Annex A explain how to adopt different types of governing document. However, we may (in exceptional circumstances) consider a request from an organisation which has not yet formally adopted a governing document. Each request will be considered on its own merits but examples of the circumstances where we may consider a draft governing document are:
77. The answers to many of the questions on the application form will depend on what is in the governing document. To apply for registration please send us:
78. Where the applicants propose to work with vulnerable beneficiaries the trustee declaration requires the trustees to confirm that the organisation has carried out any necessary or recommended checks with the Criminal Records Bureau or any other relevant agency.
79. If you adopt an appropriate approved governing document (see paragraph 60) without amending it (other than to fill in blanks or delete optional paragraphs) this will speed up your application for registration. Organisations using an approved governing document must confirm:
80. Your organisation can apply for registration via the Commission's online application for registration service. It provides a quick and easy means of getting the registration application form and governing document to the Commission. The user-friendly system will provide you with online guidance throughout completion of the form, and allows you to save the form at any time and come back to it another time if you wish. This is the first stage of online application for registration. Using the online application system will reduce the time it takes to assess your application and complete charity registration. Access to the online application for registration service is via our website.
81. Organisations that adopt one of our model governing documents will have governing documents that are easier to consider because the administrative provisions have already been agreed.
82. However, if an organisation is to be recognised as a charity it must have exclusively charitable objects. Getting this right can be difficult. To help you with this we provide some example objects for a wide variety of different types of charity on our website.
83. If the way in which the objects clause is worded is not capable of being charitable then we will have to ask you to amend the governing document before we can proceed. This is likely to cause significant delay.
84. Before using an approved governing document or a model with example objects you need to be sure that the governing document you create accurately reflects what the organisation will do and how it will operate.
85. All the trustees must sign the declaration form. To establish that a person is not disqualified from being a trustee, we need to have:
86. However, only the preferred name of each trustee will be displayed on the public Register.
87. We must apply charity law in making our judgments as to whether an organisation is charitable. This includes:
88. Our decision will be based mainly on the information you supply.
89. We must have some basic factual information about the charity and the trustees in order to make the appropriate entries in the Register of Charities. We must be satisfied that the organisation is eligible to be registered and not exempt or excepted from registration (please refer also to paragraphs 72 and 73).
90. If the organisation cannot operate, and has no plans to enable it to operate in the foreseeable future, then it cannot remain on the Register. In addition we must be satisfied that each of the trustees is eligible to act as a trustee. We will carry out checks with other agencies (eg the Insolvency Service), and where children are involved we need to be satisfied that any necessary checks have been made through the Criminal Records Bureau against the lists it administers under the Protection of Children Act 1999.
91. In many cases we find that whilst the objects as worded are not capable of being charitable, the proposed activities when fully explained, clearly show a charitable intention. In such cases we will advise on changes to the wording of the objects, rather than simply rejecting the application.
92. Our functions under the 1993 Act include:
93. As the regulator of charities, we have a number of objectives as well, including to increase public trust and confidence in charities. We believe that a good time to offer guidance to organisations is before they start their life on the Register. We should all share the objective of seeing every charity having the best opportunity to flourish. As a result where we consider it appropriate we will offer guidance on governance and good practice issues at this stage. This may involve changes to the administrative provisions of your governing document which do not affect the charitable status of the organisation. Experience has shown that organisations appreciate being given this sort of guidance at this time.
94. When our Registration team has received:
the officer who will assess your application will send you an acknowledgement. If you apply online then you will receive an automatic acknowledgement.
95. Registration Division aims to provide an initial response to the application within 15 working days. If you have used an approved governing document without changing it and there is no significant private benefit to any trustee or related party we will normally be able to approve your application and give you the registration number within this time frame.
96. However, quite often we will need to ask further questions, before we can tell whether the organisation is charitable in law. If this happens we will give you the name and contact number for the person dealing with your application. You will also be provided with a reference number to quote in future correspondence.
97. If we need to contact you for further information or clarification, we will try to be clear about whether our questions directly relate to charitable status or to issues of governance and good practice. Sometimes as we are building up a picture of an organisation it may not be possible for us to differentiate clearly between the two until we have the necessary information.
98. In general the answer to this is 'NO'. The reason for this is that, in our experience, organisations which already exist have a clear idea of the ways in which they will carry out their objects. In the past we have found that, where an organisation submits a draft governing document, this often leads to lengthy correspondence because the promoters have no clear understanding of what they want to do. In many of these cases the organisation is never actually set up.
99. The only general exception is for applications from companies wishing to use the word charity or charitable in its name (see paragraph 34) or for disaster appeals (see paragraphs 22 and 23).
100. Where the objects and activities appear to be charitable you will be asked to submit a formal application, but this is no guarantee that registration will be granted.
101. If, having considered all the information provided with the application, we decide that your organisation is not exclusively charitable we will write to you and let you know why. The letter will also explain that if you disagree with our decision or if you feel we have misunderstood your application, you will need to write to us setting out the reasons why you think your organisation is charitable. This will allow us to review our decision. You have a right of appeal to the Charity Tribunal where, despite a review of the decision, we are unable to register your organisation.
102. If your application is successful, the date of registration is the date on which we enter your organisation on the Register of Charities. However, charitable status does not depend on registration but on the date that the organisation was set up as a charity (for example, the date charitable objects were adopted). HM Revenue and Customs may backdate tax exemption to the date on which your organisation started to carry out exclusively charitable aims, even if this was before the date of registration.
103. Details about your charity will appear on the Public Register within 2 working days of being accepted for registration.
104. Registration is not the end of the process. You will have a number of ongoing duties and responsibilities, some of which may involve regular contact with us. This contact will not only provide you with advice and help when you need it, but provides the general public with confidence that charities are being effectively monitored and checked to make sure they are doing what they should. The following is a list of some of the things you will have to do if you are the trustee of a registered charity:
105. If your application for registration is successful, we will send each trustee a letter and booklet welcoming them to trusteeship and reminding them of these duties, and we will also write to the nominated correspondent confirming your charity's entry on the Register of Charities.
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What kind of organisation does a constitution create? | |
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Type of organisation: |
Unincorporated Association |
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Trustees are usually called: |
Executive or Management Committee members |
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A constitution may also be known by another name, such as Rules. | |
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The 'association' part of the description means that it is an organisation consisting of a group of people who have decided to co-operate in furthering what the organisation is set up to do, and who have certain parts to play in its administration. | |
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The 'unincorporated' part of the description tells you that the organisation is not a company. This means that the association will not:
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It may be appropriate to establish an unincorporated association where any one or more of the following applies:
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Professional legal advice Generally, you do not need this. As a constitution is a less complex document than a trust deed or articles of association, you may not need the help of a professional legal adviser to set it up. Further guidance on preparing a constitution can be found in Choosing and Preparing a Governing Document (CC22). | |
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How is a constitution put into operation? In practice, it is normally put into operation by being adopted (accepted for use) at a formal meeting of those people who are, or will be, the charity trustees and the general membership. You will require a final typed version of the constitution which must:
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What documents are needed for registration? As well as the application form and the trustee declaration, both of which are included in the Application to Register a Charity Pack , we need:
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What kind of organisation does a trust deed create? | |
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Type of organisation: |
Trust |
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Trustees are usually called: |
Trustees |
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Trust deeds may also be known by other names, such as declaration or deed of trust, or deed of settlement. |
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A trust deed will create a trust. A trust cannot own land or sign documents in its own name. | |
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It may be appropriate to establish a trust where some or all of the following apply:
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Professional legal advice A trust deed is a formal document, so you may need the help of a professional legal adviser to complete and execute it. Further information about preparing a trust deed can be found in Choosing and Preparing a Governing Document (CC22). |
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How is a trust deed put into operation? It is executed: this means that it needs to be signed and dated, in the presence of an independent witness, by those who are setting up the trust. The witnesses must then sign their name against each of those signatures and give their address. The purpose of this is to verify the identity of those signing. The trust deed should refer to a specific amount of money or some other asset that will belong to the trust at the time that the trust deed is executed. It is accepted for a nominal sum of money to be declared, say £5 or £10. If the trust deed declares charitable trusts but does not refer to any actual assets which are held on those trusts at the time the deed is executed, then we cannot register the charity unless and until there is independent evidence that some property has actually been settled on the trusts of the deed, and that the charity meets the minimum requirements for registration. | |
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Does it need to be stamped? Deeds executed before 1 December 2003 require stamping.
Deeds executed on or after 1 December 2003 but before 13 March 2008 only require stamping if the deed declares trust over stocks and shares.
Deeds executed on or after 13 March 2008 do not require stamping.
If your deed needs to be stamped then it should be sent to:
HM Revenue and Customs
Further information can be found on the HM Revenue and Customs website (www.hmrc.gov.uk) or by ringing the Stamp Duty helpline: 0845 603 0135. | |
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What documents are needed for registration? As well as the application form and the trustee declaration, both of which are included in the Application to Register a Charity Pack , we need:
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What kind of organisation do articles of association create? | |
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Type of organisation: |
Company limited by guarantee |
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Trustees are usually called: |
Board, council of management or directors |
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Articles of association create a company. A company has an advantage over a trust and an unincorporated association in that it is 'incorporated'. This means that the law considers it to be a person, in the same way as an individual. Therefore a company, like an individual, can own land. (As part of its articles of association document a company has a memorandum of association which refers to its subscribers' wish to form the company and their agreement to become its members.) | |
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A company is a legal person quite separate from its members and directors. The directors are agents of the company and as such are not normally liable personally for its debts. A person who acts as a director whilst disqualified from being one may be personally liable. | |
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A director may be liable to make payments to the company:
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The company will also have 'limited liability' which means, in the case of a typical charitable company, that its members are normally only liable for the debts of the company to the extent which they have undertaken to guarantee them (usually the limit of liability stated in the articles of association is a nominal amount like £5). | |
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A company is subject to company law, as well as to charity law, and there are certain duties which must be observed, such as the annual filing of accounts with the Registrar of Companies. | |
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However, charitable companies can never be the same as commercial companies. The main purpose of commercial companies is to make profits for distribution to their members. The constitution of a charitable company always precludes the distribution of profits to members. All the property of a charitable company is applicable for charitable aims. | |
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Which organisations use this type of structure? It may be appropriate to establish a company where some or all of the following apply:
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Professional legal advice Because a company is subject to company law (which can be quite complex) you may well need the help of a professional legal adviser to set it up. |
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How are articles of association put into operation? They are put into operation by being subscribed to by one or more people in accordance with the provisions of Part 2 of the Companies Act 2006, and by registration with the Registrar of Companies at Companies House who will issue a Certificate of Incorporation. There is a fee for registering companies with the Registrar of Companies. (You can contact Companies House Cardiff CF14 3UZ, telephone 0870 333 3636 or on their website at www.companieshouse.gov.uk). |
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What documents are needed for registration? As well as the application form and the trustee declaration, both of which are included in the Application to Register a Charity Pack , we need:
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Copies of most of our publications can be found on our website with further advice on registration, duties of trustees, commonly asked questions about the accounts regulations and the Annual Return forms etc.
Charity Commission Direct
PO Box 1227
Liverpool
L69 3UG
For all general telephone enquiries: 0845 300 0218
Action with Communities in Rural England (ACRE)
Somerford Court
Somerford Road
Cirencester
Gloucestershire GL7 1TW
Tel: 01285 653477
Website: www.acre.org.uk
The organisation offers advice and support on a wide range of issues from registration to maintaining buildings. It also provides training and publishes books and leaflets and has a special service for the managing trustees of village halls called 'The National Village Halls Advisory Service'.
Local ACREs assist charities and voluntary organisations in their area. The National Association offers advice direct, or can put charities in touch with their local ACRE.
Association of Charitable Foundations
Central House
14 Upper Woburn Place
London WC1H 0AE
Tel: 020 7255 4499
Website: www.acf.org.uk
The Association assists grant-making trusts and foundations, including new ones at the early stages of formation. It provides a variety of courses, seminars and publications on good practice in grant-making and on relevant aspects of charity law, and represents grant-making charities in the public arena. The Association is a membership organisation open to all grant-making charities, and welcomes enquiries from non-members without obligation to join.
Charities Aid Foundation
25 Kingshill Avenue
Kings Hill
West Malling
Kent ME19 4TA
Tel: 01732 520000
Website: www.cafonline.org.uk
The Foundation provides services to facilitate tax-efficient giving, and offers covenant administration services. It carries out research and publishes information on all aspects of funding concerning the voluntary sector. Its services are available to the voluntary sector in general.
The Charity Law Association
CLA Administrator
E-mail: admin@charitylawassociation.org.uk
Community Matters
12-20 Baron Street
Islington
London N1 9LL
Tel: 020 7837 7887
Website: www.communitymatters.org.uk
The organisation provides advice and assistance, a Community Consultancy Service, courses, seminars, conferences and a wide range of publications. Its services are offered to new and established community organisations.
Companies House
Crown Way
Maindy
Cardiff
CF14 3UZ
Tel: 0870 333 3636
Website: www.companieshouse.gov.uk
Directory of Social Change
24 Stephenson Way
London NW1 2DP
Tel: 0845 077 7707
The organisation offers a wide range of courses and training events on many subjects including volunteer management, communications and fund-raising. A wide range of publications is also produced (eg Fundraising Handbook, Guide to the Major Trusts). Services are available to any voluntary sector group.
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Tel: 020 7066 1000
Website: www.fsa.gov.uk
Gambling Commission
Lotteries Section
4th Floor
Victoria Square House
Victoria Square
Birmingham
B2 4BP
Tel: 0121 230 6666
The organisation provides information about the regulations concerning lotteries. It is a Government Agency, and any individual may therefore seek information from the Board.
HM Revenue and Customs
HMRC Charities
St John's House
Merton Road
Bootle
Merseyside L69 9BB
Tel: 08453 020203
HMRC Charities is the business stream of HM Revenue and Customs which is responsible for all matters relating to the taxation of charities, including VAT. They have a range of booklets about tax reliefs available to charities.
Housing Corporation
Maple House
149 Tottenham Court Road
London W1P 6BN
Tel: 0845 230 7000
Institute of Fundraising
Park Place
12 Lawn Lane
London
SW8 1UD
Tel: 020 7840 1000
The Institute of Fundraising is a registered charity offering education and training courses in charity fundraising with the aim of improving standards of performance and ethical practice in charity fundraising.
The Institute is a professional one, and membership is open only to individuals who must abide by a strict code of practice.
Interchange Legal Advisory Service
Interchange Studios
Hampstead Town Hall Centre
213 Haverstock Hill
London NW3 4QP
Tel: 020 7692 5860
Fax: 020 7813 7493
E-mail: legal@interchange.org.uk
This body gives advice to the whole range of charities, and proposed charities, including national and local groups. The advice covers the preparation of governing documents, advising on trust and charity law, and matters relating to trustees' responsibilities, employment, property, dissolution and insolvency.
National Association for Voluntary and Community Action (NAVCA)
The Tower
2 Furnival Square
Sheffield S1 4QL
Tel: 0114 278 6636
This organisation is the national umbrella body for 250 Councils for Voluntary Service in England. A local Council for Voluntary Service provides advice, support and information to voluntary organisations and charities in their area, including help with registration. If you would like details of your local Council for Voluntary Service please contact NAVCA as above.
Similar organisations to the NAVCA exist for voluntary organisations and charities based in Wales. Please contact WCVA (see below).
National Council for Voluntary Organisations (NCVO)
Regent's Wharf
8 All Saints Street
London N1 9RL
Tel: 020 7713 6161
Freephone helpdesk: 0800 2798 798
NCVO is the largest umbrella body for the voluntary and community sector and offers advice and information on a wide range of subjects. As well as providing best practice advice, NCVO represents the sector when dealing with government and policy makers. NCVO is also a membership body and has over 4,200 organisations as members.
Northern Irish charities:
Department for Social Development
The Voluntary & Community Unit
Ground Floor
Lighthouse Building
1 Cromac Place
Gasworks Business Park
Ormeau Road
Belfast BT7 2JB
Tel: 02890 829414
E-mail: vcu@dsdni.gov.uk
Office of the Scottish Charity Regulator
2nd Floor
Quadrant House
9 Riverside Drive
Dundee DD1 4NY
Tel: 01382 346890 or 07724 150833
E-mail: info@oscr.org.uk
Wales Council for Voluntary Action (WCVA)
Baltic House
Mount Stuart Square
Cardiff CF10 5FH
Tel: 029 2043 1700
WCVA is the voice of the voluntary sector in Wales. It represents the interest of and campaigns for voluntary organisations, volunteers and communities in Wales. It provides a comprehensive range of information, consultancy, funding, management and training services.
Wales Association of County Voluntary Councils (WACVC)
c/o G Benfield
WCVA
(Address as above)
Tel: 029 2043 1700
We produce a range of guidance on our website and also in a variety of hard copy formats (eg booklets, CDs). Those which are relevant to starting and registering a charity are listed below with appropriate reference numbers. For a full list see Charity Commission Publications (CC1). All are easily viewed on, or downloaded from, our website, or may also be obtained by calling Charity Commission Direct on 0845 300 0218.
To request these on CD, replace the CC prefix in the reference number with CD.
Also available:
| Charitable Companies: Model Articles of Association | GD1 |
| Charitable Trusts: Model Trust Deed | GD2 |
| Charitable Associations: Model Constitution | GD3 |
All of our publications are available in Braille on request.
Most of our publications are available in Welsh, and CC3a is also available on our website in Arabic, Bengali, Cantonese, Gujarati, Punjabi, Somali, and Urdu. Please ask Charity Commission Direct staff for the latest details.