Charity Law Reform: Some New Proposals From the Law Commission

Readers may recall that the Law Commission carried out a consultation on a range of charity law issues last year. That consultation ran to nearly 300 pages and included a clear and detailed analysis of many of the issues that keep charity lawyers busy. It put forward a number of proposals for change, including reform of the rules governing:

• how different types of charity can amend their charitable purposes,
• what procedures charities need to follow when disposing of land,
• the treatment of permanently endowed assets,
• the remuneration of trustees,
• incorporation, merger and insolvency of charities,
• certain powers of the Charity Commission with regard to charity names and determining the membership of charities, and
• the role of the Charity Tribunal.

As part of the process of formulating its recommendations for legislation, the Law Commission is now seeking views on two points on which its 2015 consultation had not specifically asked people to comment. The latest consultation, which runs from 1 September to 31 October 2016 and can be seen here , invites comments on the following proposals:

• that unincorporated charities should have the same broad power to amend their purposes (subject to the consent of the Charity Commission) that incorporated charities already have, removing the need for the trustees of an unincorporated charity to show that they are in one of the situations described in section 62 of the Charities Act 2011 (known as “cy-près” situations) where the Commission may make a Scheme to modify the charity’s purposes, and

• that it should be made possible for a charity that is either a company or a CIO to pass a resolution to acquire the status of a trust corporation, thus enabling it to hold and deal with property that it holds on trust, as can be necessary when a corporate charity receives permanently endowed assets as part of a merger or incorporation process.

If you would like to know more about these issues and how they might affect your charity, please contact Paul Ridout on 01895 207862 or at paul.ridout@ibblaw.co.uk.