If they are not careful, charities can lose their right to be registered as a charity – through the actions of just one person. How do you reduce the chance of this happening to your charity?
What’s the problem?
As from 25 February 2012 each charity needs to tell the Charities Commission who its officers are. There are minimum standards that have to be met to be an officer. If one of the officers ceases to be qualified to be an officer then the charity no longer qualifies for registration. It could therefore lose its charitable status.
The first thing a charity has to do is to decide who it needs to certify as “officers”.
While this can vary, it usually it will include all members of the governing body of the organisation plus all those in a position to have significant influence over its management or administration . That could include people like a manager or administrator for example, even if they are not on the governing body. Even unpaid volunteers could be included.
There is a more limited requirement for trusts. For them the only people who need to be certified as officers are the trustees.
In order to qualify an officer must not be:
- an undischarged bankrupt
- younger than 16
- convicted of a crime of dishonesty and sentenced within the last seven years
- disqualified from being an officer under the rules of their organisation
- disqualified by the Commission under section 31(4) of the Charities Act 2005
- subject to a property order under the Protection of Personal and Property Rights Act 1988, or have their property managed by a trustee corporation under section 32 of that Act (i.e. a person who is not fully able to manage their affairs)
- prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, the Securities Act 1978, the Securities Markets Act 1988, or the Takeovers Act 1993
- a body corporate that is being wound up, in liquidation or receivership or subject to statutory management under the Corporations (Investigation and Management) Act 1989.
If an officer who originally qualified later ceases to qualify the Commission has to be notified.
If they continue as an officer then the charity ceases to be qualified for registration. Therefore if, for example, someone is convicted of a crime of dishonesty and doesn’t tell the charity then the other members will not know that the whole charity is disqualified.
What should you do?
On a regular basis all officers should state in writing to the charity that they remain qualified to be an officer. This could easily be done at each or a designated meeting of the charity.
As long as all the officers are frank and honest with their co-officers, you shouldn’t be suddenly surprised to find that you have unknowingly been operating in breach of the registration requirements.
If you need help in deciding what to do, please contact us.