Gavel and Law BooksOn 20 March 2015 a consultation paper was published on technical issues in charity law.

This project originated from our Eleventh Programme of Law Reform.  Part of the project is a review of the procedures by which charities governed by Royal Charter and by Act of Parliament amend their governing documents.  The remainder of the project comprises certain issues arising out of the review of the Charities Act 2006 conducted by Lord Hodgson of Astley Abbotts regarding:

  • the procedures by which charities change their purposes and the administrative provisions of their governing documents;
  • the application of property cy-près, including the application cy-près of the proceeds of fundraising appeals;
  • the regulation of the acquisition, disposal and mortgage of land by charities;
  • the remuneration of a trustee of a charity for the supply of goods to the charity;
  • the power to award an equitable allowance to a trustee who has obtained an unauthorised profit;
  • the power for trustees to make ex gratia payments out of the funds of the charity;
  • the transfer of assets and liabilities on incorporation and merger, and gifts made by will to charities that have merged;
  • the availability of property held on charitable trust in the insolvency of a trustee;
  • the power of the Charity Commission to require a charity to change its name, and to refuse to register a charity unless it changes its name;
  • the power for the Charity Commission to determine the identity of the trustees of a charity; and
  • certain powers of the Charity Tribunal.

We consider all of these issues in the consultation paper.  We also examine the law relating to the use of permanent endowment, and consider whether there are other approaches that would allow permanent endowment to be used more flexibly.

In some instances we have come to the view that the law should be reformed and we make provisional proposals to that effect; in others we ask consultees whether there is a need for reform and, if so, how that might be achieved.  We also ask consultees to share their experiences of the application of the law in practice.  We have been mindful throughout of the need for a proportionate system of legal regulation for charities – a system that provides trustees with flexibility and freedom when carrying out the purposes of the charity without exposing the charity’s assets, its beneficiaries and its trustees to undue levels of risk.

To respond to the consultation please download the consultation paper from the Law Commission website.

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