The structure and/or legal status of your charity can affect the legal implications on trustees, employees and the charity itself. We can help you to understand your options and determine the right structure for your charity.
Many charities are unincorporated charities, yet they own property, employ people, enter into contracts and provide services to members of the public, which opens the organisation up to the risk of a claim being made against them by a third party. The legal status and structure of your charity will result in varying outcomes and liabilities of any such action.
Where a charity is unincorporated, it is not a legal entity in its own right and in these cases, liability in respect of any claim will rest with the trustees of the charity personally. These risks can, to an extent, be mitigated by insurance - however they cannot be removed entirely and there will be situations in which insurance will not be available.
Considering your options
Becoming a Charitable Incorporated Organisation provides the trustees of the charity with protection from claims by third parties against the charity by, in most situations, transferring liability to the new entity. They provide corporate status with the Charity Commission acting as a single regulator and are governed by charity law. Charities that are companies limited by guarantee are subject to both company law and charity law, regulated by both the Charity Commission and Companies House.
Charitable companies limited by guarantee are now able to apply to become Charitable Incorporated Organisations. The conversion process is intended to be quick and straightforward and allows the existing charity registration number to be retained. However, not all charitable companies will be able to apply immediately and in order to utilise the process the charity must not make changes to its charitable objects.
Why choose Tozers?
Our charity and social enterprise lawyers are specialists, focussed on this sector. We work with you to understand your needs and desired goals, helping deliver them efficiently.
Our team has a wealth of knowledge in relation to charity law and regularly speak at seminars and conferences and well as hosting our own networking events.
Call us on 01392 207020 or email us on firstname.lastname@example.org to discuss how we can help you