Legalize / United Kingdom / Public General Act

Charities Act 2011

Type Public General Act

Publication 2011-12-14

Last updated 2025-11-27

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(6) For the purposes of Condition C an agreement within Condition A is in force so long as any obligations under the agreement have not been fully discharged by a party to it.

(7) Sections 187 and 188 (interpretation) apply for the purposes of this section.

Disqualification of charity trustee or trustee receiving remuneration under s.185

186

(1) This section applies to any charity trustee or trustee for a charity—

(a) who is or would be entitled to remuneration under an agreement or proposed agreement within Condition A, or

(b) who is connected with a person who is or would be so entitled.

(2) The charity trustee or trustee for a charity is disqualified from acting as such in relation to any decision or other matter connected with the agreement.

(3) But if an act is done by a person who is disqualified from doing it by virtue of subsection (2), the act is not invalid merely because of that disqualification.

(4) If the Commission is satisfied—

(a) that a person (“P”) has done any act which P was disqualified from doing by virtue of subsection (2), and

(b) that P or a person connected with P has received or is to receive from the charity any remuneration under the agreement in question,

it may make an order under subsection (5) or (6) (as appropriate).

(5) An order under this subsection is one requiring P—

(a) to reimburse to the charity the whole or part of the remuneration received as mentioned in subsection (4)(b);

(b) to the extent that the remuneration consists of a benefit in kind, to reimburse to the charity the whole or part of the monetary value (as determined by the Commission) of the benefit in kind.

(6) An order under this subsection is one directing that P or (as the case may be) the connected person is not to be paid the whole or part of the remuneration mentioned in subsection (4)(b).

(7) If the Commission makes an order under subsection (5) or (6), P or (as the case may be) the connected person accordingly ceases to have any entitlement under the agreement to so much of the remuneration (or its monetary value) as the order requires P to reimburse to the charity or (as the case may be) as it directs is not to be paid to P.

(8) Sections 187 and 188 (interpretation) apply for the purposes of this section.

Meaning of “benefit”, “remuneration”, “services” etc.

187

In sections 185 to 186A —

“benefit” means a direct or indirect benefit of any nature;

“maximum amount”, in relation to remuneration, means the maximum amount of the remuneration whether specified in or ascertainable under the terms of the agreement in question;

“remuneration” includes any benefit in kind (and “amount” accordingly includes monetary value);

Meaning of “connected person”

188

(1) For the purposes of sections 185 and 186, the following persons are connected with a charity trustee or trustee for a charity—

(a) a child, parent, grandchild, grandparent, brother or sister of the trustee;

(b) the spouse or civil partner of the trustee or of any person falling within paragraph (a);

(c) a person carrying on business in partnership with the trustee or with any person falling within paragraph (a) or (b);

(d) an institution which is controlled—

(i) by the trustee or by any person falling within paragraph (a), (b) or (c), or

(ii) by two or more persons falling within sub-paragraph (i), when taken together.

(e) a body corporate in which—

(i) the trustee or any connected person falling within any of paragraphs (a) to (c) has a substantial interest, or

(ii) two or more persons falling within sub-paragraph (i), when taken together, have a substantial interest.

(2) Sections 350 to 352 (meaning of child, spouse and civil partner, controlled institution and substantial interest) apply for the purposes of subsection (1).

Indemnity insurance for charity trustees and trustees

189

(1) The charity trustees of a charity may arrange for the purchase, out of the funds of the charity, of insurance designed to indemnify the charity trustees or any trustees for the charity against any personal liability in respect of—

(a) any breach of trust or breach of duty committed by them in their capacity as charity trustees or trustees for the charity, or

(b) any negligence, default, breach of duty or breach of trust committed by them in their capacity as directors or officers of—

(i) the charity (if it is a body corporate), or

(ii) any body corporate carrying on any activities on behalf of the charity.

(2) But the terms of such insurance must be so framed as to exclude the provision of any indemnity for a person (“P”) in respect of—

(a) any liability incurred by P to pay—

(i) a fine imposed in criminal proceedings, or

(ii) a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising),

(b) any liability incurred by P in defending any criminal proceedings in which P is convicted of an offence arising out of any fraud or dishonesty, or wilful or reckless misconduct, by P, or

(i) which P knew (or must reasonably be assumed to have known) was not in the interests of the charity, or

(ii) in the case of which P did not care whether it was in the best interests of the charity or not.

(3) For the purposes of subsection (2)(b)—

(a) the reference to any such conviction is a reference to one that has become final,

(b) a conviction becomes final—

(i) if not appealed against, at the end of the period for bringing an appeal, or

(ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of, and

(i) if it is determined and the period for bringing any further appeal has ended, or

(ii) if it is abandoned or otherwise ceases to have effect.

(4) The charity trustees of a charity may not purchase insurance under this section unless they decide that they are satisfied that it is in the best interests of the charity for them to do so.

(5) The duty of care in section 1(1) of the Trustee Act 2000 applies to a charity trustee when making such a decision.

(6) This section—

(a) does not authorise the purchase of any insurance whose purchase is expressly prohibited by the trusts of the charity, but

(b) has effect despite any provision prohibiting the charity trustees or trustees for the charity receiving any personal benefit out of the funds of the charity.

Power to amend s.189

190

The Secretary of State may by order make such amendments of section 189(2) and (3) as the Secretary of State considers appropriate.

Powers to relieve trustees and auditors etc. from liability

Commission’s power to relieve trustees and auditors etc. from liability

191

(1) This section applies to a person (“P”) who is or has been—

(a) a charity trustee or trustee for a charity,

(b) a person appointed to audit a charity's accounts (whether appointed under an enactment or otherwise), or

(c) an independent examiner or other person appointed to examine or report on a charity's accounts (whether appointed under an enactment or otherwise).

(2) If the Commission considers—

(a) that P is or may be personally liable for a breach of trust or breach of duty committed in P's capacity as a person within subsection (1)(a), (b) or (c), but

(b) that P has acted honestly and reasonably and ought fairly to be excused for the breach of trust or duty,

the Commission may make an order relieving P wholly or partly from any such liability.

(3) An order under subsection (2) may grant the relief on such terms as the Commission thinks fit.

(4) Subsection (2) does not apply in relation to any personal contractual liability of a charity trustee or trustee for a charity.

(5) For the purposes of this section and section 192—

(a) subsection (1)(b) is to be read as including a reference to the Auditor General for Wales acting as auditor under Part 8, and

(b) subsection (1)(c) is to be read as including a reference to the Auditor General for Wales acting as examiner under Part 8;

and in subsection (1)(b) and (c) any reference to a charity's accounts is to be read as including any group accounts prepared by the charity trustees of a charity.

(6) This section does not affect the operation of—

(a) section 61 of the Trustee Act 1925 (power of court to grant relief to trustees),

(b) section 1157 of the Companies Act 2006 (power of court to grant relief to officers or auditors of companies), or

Court’s power to grant relief to apply to all auditors etc. of charities which are not companies

192

(1) Section 1157 of the Companies Act 2006 (power of court to grant relief to officers or auditors of companies) has effect in relation to a person to whom this section applies as it has effect in relation to a person employed as an auditor by a company.

(2) This section applies to—

(a) a person acting in a capacity within section 191(1)(b) or (c) in a case where, apart from this section, section 1157 of the 2006 Act would not apply in relation to that person as a person so acting, and

(b) a charity trustee of a CIO.

Part 10 — Charitable companies etc.

Introductory

Meaning of “charitable company”

193

In this Act “charitable company” means a charity which is a company.

Disclosure of charitable status by companies

Requirement to disclose charitable status

194

(1) Where a charitable company's name does not include the word “charity” or “charitable”, the fact that the company is a charity must be stated in legible characters—

(a) in every location, and in every description of document or communication, in which it is required by regulations under section 82 of the Companies Act 2006 to state its registered name, and

(b) in all conveyances purporting to be executed by the company.

(2) Where a company's name includes the word “elusen” or “elusennol” (the Welsh equivalents of “charity” and “charitable”), subsection (1) does not apply in relation to any document that is wholly in Welsh.

(3) The statement required by subsection (1) must be in English, except that, in the case of a document that is otherwise wholly in Welsh, the statement may be in Welsh if it consists of or includes the word “elusen” or “elusennol”.

(4) In subsection (1)(b) “conveyance” means any instrument creating, transferring, varying or extinguishing an interest in land.

Civil consequences of failure to make required disclosure

195

(1) This section applies to any legal proceedings brought by a charitable company to which section 194 applies to enforce a right arising out of a contract or conveyance in connection with which there was a failure to comply with that section.

(2) The proceedings must be dismissed if it is shown that the defendant to the proceedings—

(a) has a claim against the company arising out of the contract or conveyance that the defendant has been unable to pursue because of the company's failure to comply with section 194, or

(b) has suffered some financial loss in connection with the contract or conveyance because of the company's failure to comply with that section,

unless the court before which the proceedings are brought is satisfied that it is just and equitable to permit the proceedings to continue.

(3) This section does not affect the right of any person to enforce such rights as that person may have against another in any proceedings brought by the other.

Criminal consequences of failure to make required disclosure

196

(1) Where a charitable company fails, without reasonable excuse, to comply with section 194, an offence is committed by—

(a) the company, and

(b) every officer of the company who is in default.

(2) For this purpose a shadow director of the company is treated as an officer of the company if the failure is to comply with section 194(1)(a) and that person would be treated as an officer of the company for the purposes of the corresponding requirement of regulations under section 82 of the Companies Act 2006.

(3) A person guilty of such an offence is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding 10% of level 3 on the standard scale.

(4) Expressions used in this section have the same meaning as in section 84 of the Companies Act 2006 (criminal consequences of failure to disclose company's registered name).

Restrictions on alteration of objects

Alteration of objects by bodies corporate and charitable status

197

(1) Subsection (2) applies where a charity—

(a) is a company or other body corporate, and

(b) has power to alter the instruments establishing or regulating it as a body corporate.

(2) No exercise of the power which has the effect of the body ceasing to be a charity is valid so as to affect the application of—

(a) any property acquired under any disposition or agreement previously made otherwise than for full consideration in money or money's worth, or any property representing property so acquired,

(b) any property representing income which has accrued before the alteration is made, or

198

(1) Any regulated alteration by a charitable company—

(a) requires the prior written consent of the Commission, and

(b) is ineffective if such consent has not been obtained.

(2) The following are regulated alterations—

(a) an amendment of the company's articles of association which alters the charitable purposes of the company,

(b) any alteration of any provision of its articles of association directing the application of property of the company on its dissolution, and

(c) any alteration of any provision of its articles of association where the alteration would provide authorisation for any benefit to be obtained by directors or members of the company or persons connected with them.

(2A) In considering whether to consent to an alteration falling within subsection (2)(a) the Commission must have regard to—

(a) the purposes of the company when it was established, if and so far as they are reasonably ascertainable,

(b) the desirability of securing that the purposes of the company are, so far as reasonably practicable, similar to the purposes being altered, and

(c) the need for the company to have purposes which are suitable and effective in the light of current social and economic circumstances.

(3) Where a company that has made a regulated alteration in accordance with subsection (1) is required—

(a) by section 26 of the Companies Act 2006 to send to the registrar of companies a copy of its articles as amended,

(b) by section 30 of that Act to forward to the registrar a copy of the special resolution effecting the alteration, or

the copy or notice must be accompanied by a copy of the Commission's consent.

(4) If more than one of those provisions applies and they are complied with at different times, the company need not send a further copy of the Commission's consent if a copy was sent on an earlier occasion.

(5) Subsections (2) to (4) of section 30 of that Act (offence of failing to comply with section 30) apply in relation to a failure to comply with subsection (3) as in relation to a failure to comply with that section.

Meaning of “benefit” in s.198(2)

199

For the purposes of section 198(2)(c) “benefit” means a direct or indirect benefit of any nature, except that it does not include—

(a) any remuneration whose receipt may be authorised under section 185, or

(b) the purchase of any insurance which may be authorised under section 189.

Meaning of “connected person” in s.198(2)

200

(1) For the purposes of section 198(2)(c), the following persons are connected with a director or member of a charitable company—

(a) a child, parent, grandchild, grandparent, brother or sister of the director or member;

(b) the spouse or civil partner of the director or member or of any person falling within paragraph (a);

(c) a person carrying on business in partnership with the director or member or with any person falling within paragraph (a) or (b);

(d) an institution which is controlled—

(i) by the director or member or by any person falling within paragraph (a), (b) or (c), or

(ii) by two or more persons falling within sub-paragraph (i), when taken together.

(e) a body corporate in which—

(i) the director or member or any connected person falling within any of paragraphs (a) to (c) has a substantial interest, or

(ii) two or more persons falling within sub-paragraph (i), when taken together, have a substantial interest.

(2) Sections 350 to 352 (meaning of child, spouse, civil partner, controlled institution and substantial interest) apply for the purposes of subsection (1).

201

(1) In the case of a charitable company, each of the following is ineffective without the prior written consent of the Commission—

(a) any approval given by the members of the company under any provision of Chapter 4 of Part 10 of the Companies Act 2006 (transactions with directors requiring approval by members) listed in subsection (2), and

(b) any affirmation given by members of the company under section 196 or 214 of the 2006 Act (affirmation of unapproved property transactions and loans).

(2) The provisions of the 2006 Act are—

(a) section 188 (directors' long-term service contracts);

(b) section 190 (substantial property transactions with directors etc.);

(d) section 201 (credit transactions for benefit of directors etc.);

(e) section 203 (related arrangements);

(f) section 217 (payments to directors for loss of office);

(g) section 218 (payments to directors for loss of office: transfer of undertaking etc.).

202

(1) A charitable company may not do an act to which this section applies without the prior written consent of the Commission.

(2) This section applies to an act that—

(a) does not require approval under a listed provision of Chapter 4 of Part 10 of the Companies Act 2006 (transactions with directors) by the members of the company, but

(b) would require such approval but for an exemption in the provision in question that disapplies the need for approval on the part of the members of a body corporate which is a wholly-owned subsidiary of another body corporate.

(3) The reference to a listed provision is a reference to a provision listed in section 201(2).

(4) If a company acts in contravention of this section, the exemption referred to in subsection (2)(b) is to be treated as being of no effect in relation to the act.

Restoration of charitable company to register

Application for restoration of charitable company to register

203

(1) The Commission may make an application under section 1029 of the Companies Act 2006 (application to court for restoration to the register of companies) to restore a charitable company to the register of companies.

(2) The power exercisable by the Commission by virtue of this section is exercisable—

(a) by the Commission of its own motion, but

(b) only with the agreement of the Attorney General on each occasion.

Part 11 — Charitable incorporated organisations (CIOs)

CHAPTER 1 — General

Nature and constitution

Meaning of “CIO”

204

In this Act “CIO” means charitable incorporated organisation.

Nature

205

(1) A CIO is a body corporate.

(2) A CIO must have—

(a) a constitution;

(b) a principal office, which must be in England or in Wales;

(3) The members may be—

(a) not liable to contribute to the assets of the CIO if it is wound up, or

(b) liable to do so up to a maximum amount each.

Constitution

206

(1) A CIO's constitution must state—

(a) its name,

(b) its purposes,

(d) whether or not its members are liable to contribute to its assets if it is wound up, and (if they are) up to what amount.

(2) A CIO's constitution must make provision—

(a) about who is eligible for membership, and how a person becomes a member,

(b) about the appointment of one or more persons who are to be charity trustees of the CIO, and about any conditions of eligibility for appointment, and

(3) A CIO's constitution must also provide for such other matters, and comply with such requirements, as are specified in CIO regulations.

(4) A CIO's constitution—

(a) must be in English if its principal office is in England;

(b) may be in English or in Welsh if its principal office is in Wales.

(5) A CIO's constitution must be in the form specified in regulations made by the Commission, or as near to that form as the circumstances admit.

(6) Subject to anything in a CIO's constitution—

(a) a charity trustee of the CIO may, but need not, be a member of it,

(b) a member of the CIO may, but need not, be one of its charity trustees, and

Formation and registration of CIO

Application for CIO to be constituted and registered

207

(1) Any one or more persons (“the applicants”) may apply to the Commission for a CIO to be constituted and for its registration as a charity.

(2) The applicants must supply the Commission with—

(a) a copy of the proposed constitution of the CIO,

(b) such other documents or information as may be prescribed by CIO regulations, and

Cases where application must or may be refused

208

(1) The Commission must refuse an application under section 207 if—

(a) it is not satisfied that the CIO would be a charity at the time it would be registered, or

(b) the CIO's proposed constitution does not comply with one or more of the requirements of section 206 (constitution of CIOs) and any regulations made under that section.

(2) The Commission may refuse such an application if—

(a) the proposed name of the CIO—

(i) is the same as, or

(ii) is in the opinion of the Commission too like,

the name or a working name of any other charity (whether registered or not), or

(b) the Commission is of the opinion referred to in any of paragraphs (b) to (e) of section 42(2) (power to require charity's name or working name to be changed) in relation to the proposed name of the CIO (reading paragraph (b) as referring to the proposed purposes of the CIO and to the activities which it is proposed it should carry on).

Registration of CIO

209

(1) If the Commission grants an application under section 207 it must register the CIO to which the application relates as a charity in the register of charities.

(2) The entry relating to the charity's registration in the register of charities must include—

(a) the date of the charity's registration, and

(b) a note saying that it is constituted as a CIO.

(3) A copy of the entry in the register must be sent to the charity at the principal office of the CIO.

Effect of registration of CIO

210

(1) Upon the registration of the CIO in the register of charities, it becomes by virtue of the registration a body corporate—

(a) whose constitution is that proposed in the application,

(b) whose name is that specified in the constitution, and

(2) All property for the time being vested in the applicants (or, if more than one, any of them) on trust for the charitable purposes of the CIO (when incorporated) by virtue of this subsection becomes vested in the CIO upon its registration.

Name and status

Name

211

(1) The name of a CIO must appear in legible characters—

(a) in every location, and in every description of document or communication, in which a charitable company would be required by regulations under section 82 of the Companies Act 2006 to state its registered name, and

(b) in all conveyances purporting to be executed by the CIO.

(2) In subsection (1)(b), “conveyance” means any instrument creating, transferring, varying or extinguishing an interest in land.

Status

212

(1) Subsection (3) applies if the name of a CIO does not include—

(a) “charitable incorporated organisation”,

(b) “CIO”, with or without full stops after each letter, or

and it is irrelevant, in any such case, whether or not capital letters are used.

(2) The Welsh equivalents referred to in subsection (1)(c) are—

(a) “sefydliad elusennol corfforedig”, or

(b) “SEC”, with or without full stops after each letter.

(3) If this subsection applies, the fact that a CIO is a CIO must be stated in legible characters in all the locations, documents, communications and conveyances mentioned in section 211(1).

(4) The statement required by subsection (3) must be in English, except that in the case of a document which is otherwise wholly in Welsh, the statement may be in Welsh.

Civil consequences of failure to disclose name or status

213

(1) This section applies to any legal proceedings brought by a CIO to enforce a right arising out of a contract or conveyance in connection with which there was a failure to comply with section 211 or 212.

(2) The proceedings must be dismissed if it is shown that the defendant to the proceedings—

(a) has a claim against the CIO arising out of the contract or conveyance that the defendant has been unable to pursue because of the failure to comply with section 211 or 212, or

(b) has suffered some financial loss in connection with the contract or conveyance because of the failure to comply with section 211 or 212,

unless the court before which the proceedings are brought is satisfied that it is just and equitable to permit the proceedings to continue.

(3) This section does not affect the right of any person to enforce such rights as that person may have against another in any proceedings brought by the other.

Offence of failing to disclose name or status

214

(1) In the case of failure, without reasonable excuse, to comply with section 211 or 212 an offence is committed by—

(a) every charity trustee of the CIO who is in default, and

(b) any other person who on the CIO's behalf—

(i) signs or authorises the signing of the offending document, communication or conveyance, or

(ii) otherwise commits or authorises the offending act or omission.

(2) A person guilty of an offence under subsection (1) is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding 10% of level 3 on the standard scale.

(3) The reference in subsection (1) to a charity trustee being in default, and the reference in subsection (2) to a daily default fine, have the same meaning as in the Companies Acts (see sections 1121 to 1123 and 1125 of the Companies Act 2006).

Offence of holding out that a body is a CIO

215

(1) It is an offence for a person (in whatever way) to hold any body out as being a CIO when it is not.

(2) It is a defence where a person is charged with an offence under subsection (1) to prove that the person believed on reasonable grounds that the body was a CIO.

(3) A person guilty of an offence under subsection (1) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

CHAPTER 2 — Powers, capacity and procedure etc.

Powers of CIO

216

(1) Subject to anything in its constitution, a CIO may do anything which is calculated to further its purposes or is conducive or incidental to doing so.

(2) The CIO's charity trustees are to manage the affairs of the CIO and may for that purpose exercise all the powers of the CIO.

Constitutional requirements

217

(1) A CIO must use and apply its property in furtherance of its purposes and in accordance with its constitution.

(2) If the CIO is one whose members are liable to contribute to its assets if it is wound up, its constitution binds the CIO and its members for the time being to the same extent as if its provisions were contained in a contract—

(a) to which the CIO and each of its members was a party, and

(b) which contained obligations on the part of the CIO and each member to observe all the provisions of the constitution.

(3) Money payable by a member to the CIO under the constitution is a debt due from that member to the CIO, and is of the nature of an ordinary contract debt.

Third parties

218

(1) Subject to subsection (3), the validity of an act done (or purportedly done) by a CIO is not to be called into question on the ground that the CIO lacked constitutional capacity.

(2) Subject to subsection (3), the power of the charity trustees of a CIO to act so as to bind the CIO (or authorise others to do so) is not to be called into question on the ground of any constitutional limitations on their powers.

(3) Subsections (1) and (2) apply only in favour of a person who gives full consideration in money or money's worth in relation to the act in question, and does not know—

(a) in a subsection (1) case, that the act is beyond the CIO's constitutional capacity, or

(b) in a subsection (2) case, that the act is beyond the constitutional powers of its charity trustees,

and (in addition) subsection (2) applies only if the person dealt with the CIO in good faith (which the person is presumed to have done unless the contrary is proved).

(4) A party to an arrangement or transaction with a CIO is not bound to inquire—

(a) whether it is within the CIO's constitutional capacity, or

(b) as to any constitutional limitations on the powers of its charity trustees to bind the CIO or authorise others to do so.

(5) If a CIO purports to transfer or grant an interest in property, the fact—

(a) that the act was beyond its constitutional capacity, or

(b) that its charity trustees in connection with the act exceeded their constitutional powers,

does not affect the title of a person who subsequently acquires the property or any interest in it for full consideration without actual notice of any such circumstances affecting the validity of the CIO's act.

(6) In any proceedings arising out of subsections (1) to (3), the burden of proving that a person knew that an act—

(a) was beyond the CIO's constitutional capacity, or

(b) was beyond the constitutional powers of its charity trustees,

lies on the person making that allegation.

(7) In this section and section 219—

(a) references to a CIO's lack of constitutional capacity are to lack of capacity because of anything in its constitution, and

(b) references to constitutional limitations on the powers of a CIO's charity trustees are to limitations on their powers under its constitution, including limitations deriving from a resolution of the CIO in general meeting, or from an agreement between the CIO's members, and the references to constitutional powers are to be read accordingly.

Limits to s.218

219

(1) Nothing in section 218 prevents a person from bringing proceedings to restrain the doing of an act which would be—

(a) beyond the CIO's constitutional capacity, or

(b) beyond the constitutional powers of the CIO's charity trustees.

(2) But no such proceedings may be brought in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the CIO.

(3) Subsection (2) does not prevent the Commission from exercising any of its powers.

(4) Nothing in section 218(2) affects any liability incurred by the CIO's charity trustees (or any one of them) for acting beyond their (or that charity trustee's) constitutional powers.

(5) Nothing in section 218 absolves the CIO's charity trustees from their duty to act within the CIO's constitution and in accordance with any constitutional limitations on their powers.

Duty of CIO members

220

Each member of a CIO must exercise the powers that the member has in that capacity in the way that the member decides, in good faith, would be most likely to further the purposes of the CIO.

Duties of charity trustees

221

(1) Each charity trustee of a CIO must exercise the powers and perform the functions that the charity trustee has in that capacity in the way that the charity trustee decides, in good faith, would be most likely to further the purposes of the CIO.

(2) Each charity trustee of a CIO must in the performance of functions in that capacity exercise such care and skill as is reasonable in the circumstances, having regard in particular—

(a) to any special knowledge or experience that the charity trustee has or purports to have, and

(b) if the charity trustee acts as such in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession.

But this is subject to any provision of a CIO's constitution permitted by virtue of regulations made under subsection (3).

(3) CIO regulations may permit a CIO's constitution to provide that the duty in subsection (2)—

(a) does not apply, or

(b) does not apply in so far as is specified in the constitution.

(4) Regulations under subsection (3) may provide for limits on the extent to which, or the cases in which, a CIO's constitution may disapply the duty in subsection (2).

Personal benefit and payments

222

(1) A charity trustee of a CIO may not benefit personally from an arrangement or transaction entered into by the CIO if, before the arrangement or transaction was entered into, the charity trustee did not disclose to all the charity trustees of the CIO any material interest (whether direct or indirect) which the charity trustee had in it or in any other person or body party to it.

(2) Nothing in subsection (1) confers authority for a charity trustee of a CIO to benefit personally from any arrangement or transaction entered into by the CIO.

(3) A charity trustee of a CIO—

(a) is entitled to be reimbursed by the CIO, or

(b) may pay out of the CIO's funds,

expenses properly incurred by the charity trustee in the performance of that charity trustee's functions as such.

Regulations about procedure of CIOs

223

(1) CIO regulations may make provision about the procedure of CIOs.

(2) Subject to—

(a) any such regulations,

(b) any other requirement imposed by or by virtue of this Act or any other enactment, and

a CIO may regulate its own procedure.

(3) But a CIO's procedure must include provision for the holding of a general meeting of its members, and the regulations referred to in subsection (1) may in particular make provision about such meetings.

CHAPTER 3 — Amendment of constitution

Amendment of constitution and procedure

224

(1) A CIO may by resolution of its members amend its constitution (and a single resolution may provide for more than one amendment).

(2) Such a resolution must be passed—

(a) by a 75% majority of those voting at a general meeting of the CIO (including those voting by proxy or by post, if voting that way is permitted), or

(b) unanimously by the CIO's members, otherwise than at a general meeting.

(3) The date of passing of such a resolution is—

(a) the date of the general meeting at which it was passed, or

(b) if it was passed otherwise than at a general meeting, the date on which provision in the CIO's constitution or in regulations made under section 223 treats it as having been passed (but that date may not be earlier than that on which the last member agreed to it).

Amendment of constitution and charitable status

225

The power of a CIO to amend its constitution is not exercisable in any way which would result in the CIO's ceasing to be a charity.

226

(1) An amendment to a CIO’s constitution which would make a regulated alteration—

(a) requires the prior written consent of the Commission, and

(b) cannot take effect if such consent has not been obtained.

(2) The following are regulated alterations—

(a) any alteration of the CIO's purposes,

(b) any alteration of any provision of the CIO's constitution directing the application of property of the CIO on its dissolution, and

(c) any alteration of any provision of the CIO's constitution where the alteration would provide authorisation for any benefit to be obtained by charity trustees or members of the CIO or persons connected with them.

(2A) In considering whether to consent to an alteration falling within subsection (2)(a) the Commission must have regard to—

(a) the purposes of the CIO when it was established, if and so far as they are reasonably ascertainable,

(b) the desirability of securing that the purposes of the CIO are, so far as reasonably practicable, similar to the purposes being altered, and

(c) the need for the CIO to have purposes which are suitable and effective in the light of current social and economic circumstances.

(3) Sections 248 (meaning of “benefit”) and 249 (meaning of “connected person”) apply for the purposes of this section.

Registration and coming into effect of amendments

227

(1) A CIO must send to the Commission a copy of a resolution containing an amendment to its constitution, together with—

(a) a copy of the constitution as amended, and

(b) such other documents and information as the Commission may require,

by the end of the period of 15 days beginning with the date of passing of the resolution (see section 224(3)).

(1A) An amendment to a CIO’s constitution that makes a regulated alteration falling within section 226(2)(a) takes effect—

(a) when it is registered by the Commission, or

(b) if later, on the date specified for that purpose in the resolution containing the amendment.

(1B) Any other amendment to a CIO’s constitution takes effect (whatever the date on which the amendment is registered by the Commission)—

(a) on the date the resolution containing it is passed, or

(b) if a later date is specified for that purpose in the resolution containing the amendment, on that later date.

(1C) Subsections (1A) and (1B) are subject to section 226(1).

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 4 — Conversion, amalgamation and transfer

Conversion of certain bodies to CIO

Application for conversion by charitable company

228

(1) A charitable company may apply to the Commission to be converted into a CIO, and for the CIO's registration as a charity, in accordance with this section.

(2) But such an application may not be made by—

(a) a company having a share capital if any of the shares are not fully paid up, or

(b) an exempt charity.

(3) The company must supply the Commission with—

(a) a copy of a resolution of the company that it be converted into a CIO,

(b) a copy of the proposed constitution of the CIO,

(d) such other documents or information as may be prescribed by CIO regulations, and

(e) such other documents or information as the Commission may require for the purposes of the application.

(4) The resolution referred to in subsection (3)(a) must be—

(a) a special resolution of the company, or

(b) a unanimous written resolution signed by or on behalf of all the members of the company who would be entitled to vote on a special resolution.

(5) Chapter 3 of Part 3 of the Companies Act 2006 (resolutions and agreements affecting a company's constitution) does not apply to such a resolution.

(6) In the case of a company limited by guarantee which makes an application under this section (whether or not it also has a share capital), the proposed constitution of the CIO must (unless subsection (8) applies) provide—

(a) for the CIO's members to be liable to contribute to its assets if it is wound up, and

(b) for the amount up to which they are so liable.

(7) That amount must not be less than the amount up to which they were liable to contribute to the assets of the company if it was wound up.

(8) If the amount each member of the company is liable to contribute to its assets on its winding up is £10 or less—

(a) the guarantee is extinguished on the conversion of the company into a CIO, and

(b) the requirements of subsections (6) and (7) do not apply.

Application for conversion by registered society

229

(1) A charity which is a registered society may apply to the Commission to be converted into a CIO, and for the CIO's registration as a charity, in accordance with this section.

“Registered society” has the same meaning as in the Co-operative and Community Benefit Societies Act 2014.

(2) But such an application may not be made by—

(a) a registered society having a share capital if any of the shares are not fully paid up, or

(b) an exempt charity.

(3) The registered society must supply the Commission with—

(a) a copy of a resolution of the registered society that it be converted into a CIO,

(b) a copy of the proposed constitution of the CIO,

(d) such other documents or information as may be prescribed by CIO regulations, and

(e) such other documents or information as the Commission may require for the purposes of the application.

(4) The resolution referred to in subsection (3)(a) must be—

(a) a special resolution of the registered society, or

(b) a unanimous written resolution signed by or on behalf of all the members of the registered society who would be entitled to vote on a special resolution.

(5) In subsection (4), “special resolution” has the meaning given in section 113 of the Co-operative and Community Benefit Societies Act 2014.

Commission to consult appropriate registrar and others

230

(1) The Commission must notify the following of an application for conversion—

(a) the appropriate registrar, and

(b) such other persons (if any) as the Commission thinks appropriate in the particular case,

and must consult those notified about whether the application should be granted.

(2) In subsection (1) and sections 231 to 233, “the appropriate registrar” means—

(a) in the case of an application by a charitable company, the registrar of companies;

(b) in the case of an application by a registered society, the Financial Conduct Authority and, if the society is a PRA-authorised person within the meaning of section 2B of the Financial Services and Markets Act 2000, the Prudential Regulation Authority.

(3) In this section and sections 231 to 233, “application for conversion” means an application under section 228 or 229.

Cases where application must or may be refused

231

(1) The Commission must refuse an application for conversion if—

(a) it is not satisfied that the CIO would be a charity at the time it would be registered,

(b) the CIO's proposed constitution does not comply with one or more of the requirements of section 206 (constitution of CIOs) and any regulations made under that section, or

(c) in the case of an application for conversion made by a company limited by guarantee, the CIO's proposed constitution does not comply with the requirements of section 228(6) and (7).

(2) The Commission may refuse an application for conversion if—

(a) the proposed name of the CIO—

(i) is the same as, or

(ii) is in the opinion of the Commission too like,

the name or a working name of any other charity (whether registered or not),

(b) the Commission is of the opinion referred to in any of paragraphs (b) to (e) of section 42(2) (power to require charity's name or working name to be changed) in relation to the proposed name of the CIO (reading paragraph (b) as referring to the proposed purposes of the CIO and to the activities which it is proposed it should carry on), or

(c) having considered any representations received from those whom it has consulted under section 230(1), the Commission considers (having regard to any regulations made under subsection (3)) that it would not be appropriate to grant the application.

(3) CIO regulations may make provision about circumstances in which it would not be appropriate to grant an application for conversion.

(4) If the Commission refuses an application for conversion, it must so notify the appropriate registrar.

Provisional and final registration of converting body

232

(1) If the Commission grants an application for conversion, it must—

(a) register the CIO to which the application related in the register of charities, and

(b) send to the appropriate registrar a copy of—

(i) each of the relevant resolutions of the converting company or registered society, and

(ii) the entry in the register relating to the CIO.

(2) In subsection (1)(b), “the relevant resolutions” means—

(a) in the case of a converting company, the resolutions referred to in section 228(3)(a) and (c), and

(b) in the case of a converting society, the resolutions referred to in section 229(3)(a) and (c).

(3) The registration of the CIO in the register is provisional only until the appropriate registrar cancels the registration of the company or society as required by subsection (4)(b).

(4) The appropriate registrar must—

(a) register the documents sent under subsection (1)(b), and

(b) cancel the registration of the company in the register of companies, or of the society in the mutual societies register,

and must notify the Commission that this action has been taken.

(5) The entry relating to the charity's registration in the register must include—

(a) a note that it is constituted as a CIO,

(b) the date on which it became so constituted, and

(6) But the matters mentioned in subsections (5)(a) and (b) are to be included only when the appropriate registrar has notified the Commission as required by subsection (4).

(7) A copy of the entry in the register must be sent to the charity at the principal office of the CIO.

Effect of registration becoming final

233

(1) Upon the cancellation by the appropriate registrar of the registration of the company or of the registered society, the company or society is converted into a CIO, a body corporate—

(a) whose constitution is that proposed in the application for conversion,

(b) whose name is that specified in the constitution, and

(c) whose first members are the members of the converting company or society immediately before the moment of conversion.

(2) If the converting company or society had a share capital—

(a) upon the conversion of the company or society all the shares are by virtue of this subsection cancelled, and

(b) no former holder of any cancelled share has any right in respect of it after its cancellation.

(3) Subsection (2) does not affect any right which accrued in respect of a share before its cancellation.

(4) The conversion of a company or society into a CIO does not affect, in particular, any liability to which the company or society was subject by virtue of its being a charitable company or registered society.

Conversion of community interest company

234

(1) CIO regulations may make provision for—

(a) the conversion of a community interest company into a CIO, and

(b) the CIO's registration as a charity.

(2) The regulations may, in particular, apply, or apply with modifications specified in the regulations, or disapply, anything in—

(a) sections 53 to 55 of the Companies (Audit, Investigations and Community Enterprise) Act 2004, or

(b) sections 228 to 233.

Amalgamation of CIOs

Application for amalgamation of CIOs

235

(1) Any two or more CIOs (“the old CIOs”) may, in accordance with this section, apply to the Commission to be amalgamated, and for the incorporation and registration as a charity of a new CIO (“the new CIO”) as their successor.

(2) The old CIOs must supply the Commission with—

(a) a copy of the proposed constitution of the new CIO,

(b) such other documents or information as may be prescribed by CIO regulations, and

(3) In addition to the documents and information referred to in subsection (2), the old CIOs must supply the Commission with—

(a) a copy of a resolution of each of the old CIOs approving the proposed amalgamation, and

(b) a copy of a resolution of each of the old CIOs adopting the proposed constitution of the new CIO.

(4) The resolutions referred to in subsection (3) must have been passed—

(a) by a 75% majority of those voting at a general meeting of the CIO (including those voting by proxy or by post, if voting that way is permitted), or

(b) unanimously by the CIO's members, otherwise than at a general meeting.

(5) The date of passing of such a resolution is—

(a) the date of the general meeting at which it was passed, or

(b) if it was passed otherwise than at a general meeting, the date on which provision in the CIO's constitution or in regulations made under section 223 treats it as having been passed (but that date may not be earlier than that on which the last member agreed to it).

Notice of application for amalgamation

236

(1) Each old CIO must—

(a) give notice of the proposed amalgamation in the way (or ways) that in the opinion of its charity trustees will make it most likely to come to the attention of those who would be affected by the amalgamation, and

(b) send a copy of the notice to the Commission.

(2) The notice must invite any persons who consider that they would be affected by the proposed amalgamation to make written representations to the Commission no later than a date determined by the Commission and specified in the notice.

Cases where application must or may be refused

237

(1) The Commission must refuse an application for amalgamation if—

(a) it is not satisfied that the new CIO would be a charity at the time it would be registered, or

(b) the new CIO's proposed constitution does not comply with one or more of the requirements of section 206 and any regulations made under that section.

(2) In addition to being required to refuse it on one of the grounds mentioned in subsection (1), the Commission must refuse an application for amalgamation if it considers that there is a serious risk that the new CIO would be unable properly to pursue its purposes.

(3) The Commission may refuse an application for amalgamation if—

(a) the proposed name of the new CIO—

(i) is the same as, or

(ii) is in the opinion of the Commission too like,

the name or a working name of any other charity (whether registered or not), or

(b) the Commission is of the opinion referred to in any of paragraphs (b) to (e) of section 42(2) (power to require charity's name or working name to be changed) in relation to the proposed name of the new CIO (reading paragraph (b) as referring to the proposed purposes of the new CIO and to the activities which it is proposed it should carry on).

(4) The Commission may refuse an application for amalgamation if it is not satisfied that the provision in the constitution of the new CIO about the matters mentioned in subsection (5) is—

(a) the same, or

(b) substantially the same,

as the provision about those matters in the constitutions of each of the old CIOs.

(5) The matters are—

(a) the purposes of the CIO,

(b) the application of property of the CIO on its dissolution, and

(c) authorisation for any benefit to be obtained by charity trustees or members of the CIO or persons connected with them.

(6) Sections 248 (meaning of “benefit”) and 249 (meaning of “connected person”) apply for the purposes of this section.

(7) In this section and sections 238 and 239, “application for amalgamation” means an application under section 235.

Registration of amalgamated CIO

238

(1) If the Commission grants an application for amalgamation, it must register the new CIO in the register of charities.

(2) The entry relating to the registration in the register of the charity constituted as the new CIO must include—

(a) a note that it is constituted as a CIO,

(b) the date of the charity's registration, and

(3) A copy of the entry in the register must be sent to the charity at the principal office of the new CIO.

Effect of registration

239

(1) Upon the registration of the new CIO it becomes by virtue of the registration a body corporate—

(a) whose constitution is that proposed in the application for amalgamation,

(b) whose name is that specified in the constitution, and

(2) Upon the registration of the new CIO—

(a) all the property, rights and liabilities of each of the old CIOs become by virtue of this subsection the property, rights and liabilities of the new CIO, and

(b) each of the old CIOs is dissolved.

(3) Subsection (4) applies to a gift if—

(a) the gift would have taken effect as a gift to one of the old CIOs if it had not been dissolved, and

(b) the date on which the gift would have taken effect is a date on or after the date of the registration of the new CIO.

(4) The gift takes effect as a gift to the new CIO.

Transfer of CIO's undertaking to another CIO

Resolutions about transfer of CIO’s undertaking to another CIO

240

(1) A CIO may resolve that all its property, rights and liabilities should be transferred to another CIO specified in the resolution.

(2) Where a CIO has passed such a resolution, it must send to the Commission—

(a) a copy of the resolution, and

(b) a copy of a resolution of the transferee CIO agreeing to the transfer to it.

(3) The resolutions referred to in subsections (1) and (2)(b) must have been passed—

(a) by a 75% majority of those voting at a general meeting of the CIO (including those voting by proxy or by post, if voting that way is permitted), or

(b) unanimously by the CIO's members, otherwise than at a general meeting.

(4) The date of passing of such a resolution is—

(a) the date of the general meeting at which it was passed, or

(b) if it was passed otherwise than at a general meeting, the date on which provision in the CIO's constitution or in regulations made under section 223 treats it as having been passed (but that date may not be earlier than that on which the last member agreed to it).

(5) The resolution of the transferor CIO does not take effect until confirmed by the Commission.

Notice of transfer of CIO’s undertaking to another CIO

241

Having received the copy resolutions referred to in section 240(2), the Commission—

(a) may direct the transferor CIO to give public notice of its resolution in such manner as is specified in the direction, and

(b) if it gives such a direction, must take into account any representations made to it by persons appearing to it to be interested in the transferor CIO, where those representations are made to it within the period of 28 days beginning with the date when public notice of the resolution is given by the transferor CIO.

Cases where confirmation of resolution must or may be refused

242

(1) The Commission must refuse to confirm the resolution of the transferor CIO if it considers that there is a serious risk that the transferee CIO would be unable properly to pursue the purposes of the transferor CIO.

(2) The Commission may refuse to confirm the resolution if it is not satisfied that the provision in the constitution of the transferee CIO about the matters mentioned in subsection (3) is—

(a) the same, or

(b) substantially the same,

as the provision about those matters in the constitution of the transferor CIO.

(3) The matters are—

(a) the purposes of the CIO,

(b) the application of property of the CIO on its dissolution, and

(c) authorisation for any benefit to be obtained by charity trustees or members of the CIO or persons connected with them.

(4) Sections 248 (meaning of “benefit”) and 249 (meaning of “connected person”) apply for the purposes of this section.

Confirmation of resolution

243

(1) If the Commission does not notify the transferor CIO within the relevant period that it is either confirming or refusing to confirm the transferor CIO's resolution, the resolution is to be treated as confirmed by the Commission on the day after the end of that period.

(2) Subject to subsection (3), “the relevant period” means—

(a) if the Commission directs the transferor CIO under section 241 to give public notice of its resolution, the period of 6 months beginning with the date when that notice is given, or

(b) otherwise, the period of 6 months beginning with the date when both of the copy resolutions referred to in section 240(2) have been received by the Commission.

(3) The Commission may at any time within the period of 6 months mentioned in subsection (2)(a) or (b) give the transferor CIO a notice extending the relevant period by such period (not exceeding 6 months) as is specified in the notice.

(4) A notice under subsection (3) must set out the Commission's reasons for the extension.

Effect of confirmation of resolution

244

(1) If the resolution of the transferor CIO is confirmed (or treated as confirmed) by the Commission—

(a) all the property, rights and liabilities of the transferor CIO become by virtue of this subsection the property, rights and liabilities of the transferee CIO in accordance with the resolution, and

(b) the transferor CIO is dissolved.

(2) Subsection (3) applies to a gift if—

(a) the gift would have taken effect as a gift to the transferor CIO if it had not been dissolved, and

(b) the date on which the gift would have taken effect is a date on or after the date on which the resolution is confirmed (or treated as confirmed).

(3) The gift takes effect as a gift to the transferee CIO.

CHAPTER 5 — Supplementary

Regulations about winding up, insolvency and dissolution

245

(1) CIO regulations may make provision about—

(a) the winding up of CIOs,

(b) their insolvency,

(d) their revival and restoration to the register following dissolution.

(1A) Regulations under subsection (1)(b) may not apply Part A1 of the Insolvency Act 1986 (moratorium) in relation to a CIO that is registered as a social landlord under Part 1 of the Housing Act 1996 (but see section 247A).

(2) The regulations may, in particular, make provision—

(a) about the transfer on the dissolution of a CIO of its property and rights (including property and rights held on trust for the CIO) to the official custodian or another person or body;

(b) requiring any person in whose name any stocks, funds or securities are standing in trust for a CIO to transfer them into the name of the official custodian or another person or body;

(c) about the disclaiming, by the official custodian or other transferee of a CIO's property, of title to any of that property;

(d) about the application of a CIO's property cy-près;

(e) about circumstances in which charity trustees may be personally liable for contributions to the assets of a CIO or for its debts;

(f) about the reversal on a CIO's revival of anything done on its dissolution.

(3) The regulations may—

(a) apply any enactment which would not otherwise apply, either without modification or with modifications specified in the regulations,

(b) disapply, or modify (in ways specified in the regulations) the application of, any enactment which would otherwise apply.

(3A) In relation to a CIO that is a private registered provider of social housing, the power under section 347(3)(b) may be used to amend, disapply, or modify (in ways specified in the regulations) any provision made by or under Part 2 of the Housing and Regeneration Act 2008 or Chapter 5 of Part 4 of the Housing and Planning Act 2016.

(4) In subsection (3), “enactment” includes a provision of subordinate legislation within the meaning of the Interpretation Act 1978.

Power to make further provision about CIOs

246

(1) CIO regulations may make further provision about applications for registration of CIOs, the administration of CIOs, the conversion of charitable companies, registered societies and community interest companies into CIOs, the amalgamation of CIOs, and in relation to CIOs generally.

(2) The regulations may, in particular, make provision about—

(a) the execution of deeds and documents;

(b) the electronic communication of messages or documents relevant to a CIO or to any dealing with the Commission in relation to one;

(d) the maintenance of other registers (for example, a register of charges over the CIO's assets).

(3) The regulations may—

(a) apply any enactment which would not otherwise apply, either without modification or with modifications specified in the regulations,

(b) disapply, or modify (in ways specified in the regulations) the application of, any enactment which would otherwise apply.

(4) The regulations may, in relation to charities constituted as CIOs—

(a) disapply any of sections 29 to 38 (registration of charities),

(b) modify the application of any of those sections in ways specified in the regulations.

(5) In subsection (3), “enactment” includes a provision of subordinate legislation within the meaning of the Interpretation Act 1978.

Meaning of “CIO regulations”

247

In this Part “CIO regulations” means regulations made by the Secretary of State.

Meaning of “benefit”

248

(1) This section applies for the purposes of sections 226(2)(c), 237(5)(c) and 242(3)(c) (cases where Commission may refuse to consent to amendment of constitution, to grant an application for amalgamation or to confirm a resolution transferring a CIO's undertaking).

(2) “Benefit” means a direct or indirect benefit of any nature, except that it does not include—

(a) any remuneration whose receipt may be authorised under section 185, or

(b) the purchase of any insurance which may be authorised under section 189.

Meaning of “connected person”

249

(1) This section applies for the purposes of sections 226(2)(c), 237(5)(c) and 242(3)(c).

(2) The following persons are connected with a charity trustee or member of a CIO—

(a) a child, parent, grandchild, grandparent, brother or sister of the trustee or member;

(b) the spouse or civil partner of the trustee or member or of any person falling within paragraph (a);

(c) a person carrying on business in partnership with the trustee or member or with any person falling within paragraph (a) or (b);

(d) an institution which is controlled—

(i) by the trustee or member or by any person falling within paragraph (a), (b) or (c), or

(ii) by two or more persons falling within sub-paragraph (i), when taken together.

(e) a body corporate in which—

(i) the trustee or member or any connected person falling within any of paragraphs (a) to (c) has a substantial interest, or

(ii) two or more persons falling within sub-paragraph (i), when taken together, have a substantial interest.

(3) Sections 350 to 352 (meaning of child, spouse, civil partner, controlled institution and substantial interest) apply for the purposes of subsection (2).

Effect of provisions relating to vesting or transfer of property

250

No vesting or transfer of any property in pursuance of any provision of this Part operates as a breach of a covenant or condition against alienation or gives rise to a forfeiture.

Part 12 — Incorporation of charity trustees

General

Incorporation of charity trustees

251

(1) The Commission may grant a certificate of incorporation of the charity trustees of a charity as a body corporate if—

(a) the charity trustees of the charity, in accordance with section 256, apply to the Commission for such a certificate, and

(b) the Commission considers that the incorporation of the charity trustees would be in the interests of the charity.

(2) Such a certificate is subject to such conditions or directions as the Commission thinks fit to insert in it.

(3) But the Commission must not grant such a certificate if the charity—

(a) appears to the Commission to be required to be registered in accordance with section 30, but

(b) is not so registered.

(4) On the grant of such a certificate—

(a) the charity trustees of the charity become a body corporate by such name as is specified in the certificate, and

(b) any rights or liabilities of those trustees in connection with any property vesting in the body under section 252 become rights or liabilities of that body.

Paragraph (b) does not affect the operation of section 254 (liability of charity trustees not affected by incorporation).

(5) After their incorporation the charity trustees—

(a) may sue and be sued in their corporate name, and

(b) have the same powers, and are subject to the same restrictions and limitations, as respects the holding, acquisition and disposal of property for or in connection with the purposes of the charity as they had or were subject to while unincorporated;

and any relevant legal proceedings that might have been continued or commenced by or against the charity trustees may be continued or commenced by or against them in their corporate name.

(6) In subsection (5) “relevant legal proceedings” means legal proceedings in connection with any property vesting in the incorporated body under section 252.

(7) An incorporated body need not have a common seal.

Estate to vest in incorporated body

252

(1) The certificate of incorporation vests in the incorporated body all real and personal estate, of whatever nature or tenure, belonging to or held by any person or persons in trust for the relevant charity.

(2) On the vesting of all real and personal estate under subsection (1), any person or persons in whose name or names any stocks, funds or securities are standing in trust for the relevant charity must transfer them into the name of the incorporated body.

(3) Subsections (1) and (2) do not apply to property vested in the official custodian.

Gifts to take effect as gifts to incorporated body

253

(1) After the incorporation under this Part of the charity trustees of any charity, every relevant donation, gift and disposition of property made—

(a) to or in favour of the charity, or the charity trustees of the charity, or

(b) otherwise for the purposes of the charity,

takes effect as if made to or in favour of the incorporated body or otherwise for the same purposes.

(2) For the purposes of subsection (1), a donation, gift or disposition of property is a relevant one if (whether of real or personal property and whether made by deed, will or otherwise)—

(a) it was lawfully made before the incorporation but has not actually taken effect, or

(b) it is lawfully made after the incorporation.

Liability of charity trustees not affected by incorporation

254

After a certificate of incorporation has been granted under this Part, all charity trustees of the charity are, despite their incorporation—

(a) chargeable for such property as comes into their hands, and

(b) answerable and accountable for their own acts, receipts, neglects, and defaults, and for the due administration of the charity and its property,

in the same manner and to the same extent as if no such incorporation had been effected.

Charity trustees bound by conditions in certificate etc.

255

(1) All conditions and directions inserted in any certificate of incorporation are binding upon and must be performed or observed by the charity trustees as trusts of the charity.

(2) Section 336 (enforcement of orders of Commission) applies to any charity trustee who fails to perform or observe any such condition or direction as it applies to a person guilty of disobedience to any such order of the Commission as is mentioned in that section.

Application procedure

Applications for incorporation

256

(1) Every application to the Commission for a certificate of incorporation under this Part must be—

(a) in writing and signed by the charity trustees of the charity concerned, and

(b) accompanied by such documents or information as the Commission may require for the purpose of the application.

(2) The Commission may require—

(a) any statement contained in any such application, or

(b) any document or information supplied under subsection (1)(b),

to be verified in such manner as it may specify.

Requirement to be met before certificate is granted

257

Before a certificate of incorporation is granted under this Part, charity trustees of the charity must have been effectually appointed to the satisfaction of the Commission.

Certificate conclusive as to compliance with incorporation requirements etc.

258

(1) A certificate of incorporation granted under this Part is conclusive evidence that all the preliminary requirements for incorporation under this Part have been complied with.

(2) The date of incorporation mentioned in the certificate is to be treated as being the date at which incorporation has taken place.

Administration etc. of charity whose charity trustees are incorporated

Filling up of vacancies in charity trustees

259

(1) This section applies where a certificate of incorporation is granted under this Part.

(2) Vacancies in the number of the charity trustees of the charity must from time to time be filled up so far as required by the constitution or settlement of the charity, or by any conditions or directions in the certificate—

(a) by such legal means as would have been available for the appointment of new charity trustees of the charity if no certificate of incorporation had been granted, or

(b) otherwise as required by such conditions or directions.

Execution of documents by incorporated body: general

260

(1) This section and section 261 have effect as respects the execution of documents by an incorporated body.

(2) If an incorporated body has a common seal, a document may be executed by the body by the affixing of its common seal.

(3) Whether or not it has a common seal, a document may be executed by an incorporated body by being—

(a) signed by a majority of the charity trustees of the relevant charity and expressed (in whatever form of words) to be executed by the body, or

(b) executed in pursuance of an authority given under section 261(1).

(4) A document duly executed by an incorporated body which makes it clear on its face that it is intended by the person or persons making it to be a deed has effect, upon delivery, as a deed; and it is presumed, unless a contrary intention is proved, to be delivered upon its being so executed.

(5) In favour of a purchaser a document is to be treated as having been duly executed by an incorporated body if it purports to be signed by—

(a) a majority of the charity trustees of the relevant charity, or

(b) such of the charity trustees of the relevant charity as are authorised by the charity trustees of that charity to execute it in the name and on behalf of the body,

and, if the document makes it clear on its face that it is intended by the person or persons making it to be a deed, it is to be treated as having been delivered upon its being executed.

(6) For the purposes of subsection (5) “purchaser”—

(a) means a purchaser in good faith for valuable consideration, and

(b) includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.

Conferral of authority to execute documents

261

(1) For the purposes of section 260(3)(b) the charity trustees of the relevant charity in the case of an incorporated body may, subject to the trusts of the charity, confer on any two or more of their number—

(a) a general authority, or

(b) an authority limited in such manner as the charity trustees think fit,

to execute in the name and on behalf of the body documents for giving effect to transactions to which the body is a party.

(2) An authority under subsection (1)—

(a) suffices for any document if it is given in writing or by resolution of a meeting of the charity trustees of the relevant charity, despite the want of any formality that would be required in giving an authority apart from that subsection;

(b) may be given so as to make the powers conferred exercisable by any of the charity trustees, or may be restricted to named persons or in any other way;

(c) subject to any such restriction, and until it is revoked, has effect, despite any change in the charity trustees of the relevant charity, as a continuing authority given by the charity trustees from time to time of the charity and exercisable by such charity trustees.

(3) In any authority under subsection (1) to execute a document in the name and on behalf of an incorporated body there is, unless the contrary intention appears, implied authority also to execute it for the body in the name and on behalf of the official custodian or of any other person, in any case in which the charity trustees could do so.

Commission's powers to amend certificate or dissolve body

Amendment of certificate of incorporation

262

(1) The Commission may amend a certificate of incorporation—

(a) on the application of the incorporated body to which it relates, or

(b) of its own motion.

(2) Before making any such amendment of its own motion, the Commission must by notice in writing—

(a) inform the charity trustees of the relevant charity of its proposals, and

(b) invite those charity trustees to make representations to it within a time specified in the notice.

(3) The time so specified must be not less than one month from the date of the notice.

(4) The Commission—

(a) must take into consideration any representations made by those charity trustees within the time so specified, and

(b) may then (without further notice) proceed with its proposals either without modification or with such modifications as appear to it to be desirable.

(5) The Commission may amend a certificate of incorporation by—

(a) making an order specifying the amendment, or

(b) issuing a new certificate of incorporation taking account of the amendment.

Dissolution of incorporated body

263

(1) The Commission may of its own motion make an order dissolving an incorporated body from such date as is specified in the order, if the Commission is satisfied—

(a) that the body has no assets or does not operate,

(b) that the relevant charity has ceased to exist,

(c) that the institution previously constituting, or treated by the Commission as constituting, the relevant charity has ceased to be, or (as the case may be) was not at the time of the body's incorporation, a charity, or

(d) that the purposes of the relevant charity—

(i) have been achieved so far as is possible, or

(ii) are in practice incapable of being achieved.

(2) The Commission may make an order dissolving an incorporated body from such date as is specified in the order, if the Commission is satisfied, on the application of the charity trustees of the relevant charity, that it would be in the interests of the charity for the body to be dissolved.

(3) Subject to subsection (4), an order made under this section with respect to an incorporated body has the effect of vesting in the charity trustees of the relevant charity, in trust for that charity, all property for the time being vested—

(a) in the body, or

(b) in any other person (apart from the official custodian),

in trust for that charity.

(4) If the Commission so directs in the order—

(a) all or any specified part of that property, instead of vesting in the charity trustees of the relevant charity, vests in—

(i) a specified person as trustee for, or nominee of, that charity, or

(ii) such persons (other than the charity trustees of the relevant charity) as may be specified;

(b) any specified investments, or any specified class or description of investments, held by any person in trust for the relevant charity are to be transferred to—

(i) the charity trustees of that charity, or

(ii) any such person or persons as is or are mentioned in paragraph (a)(i) or (ii).

For this purpose “specified” means specified by the Commission in the order.

(5) Where an order to which this subsection applies is made with respect to an incorporated body—

(a) any rights or liabilities of the body become rights or liabilities of the charity trustees of the relevant charity, and

(b) any legal proceedings that might have been continued or commenced by or against the body may be continued or commenced by or against those trustees.

(6) Subsection (5) applies to any order under this section by virtue of which—

(a) any property vested as mentioned in subsection (3) is vested—

(i) in the charity trustees of the relevant charity, or

(ii) in any person as trustee for, or nominee of, that charity, or

(b) any investments held by any person in trust for the relevant charity are required to be transferred—

(i) to the charity trustees of that charity, or

(ii) to any person as trustee for, or nominee of, that charity.

Supplementary

Records of applications and certificates

264

(1) The Commission must keep a record of all applications for, and certificates of, incorporation under this Part.

(2) Documents sent to the Commission under this Part are to be kept by the Commission for such period as it thinks fit.

(3) Documents kept under this section are to be open to public inspection at all reasonable times.

(4) Any person who is provided with a copy or extract of any document kept under this section may require it to be certified by a certificate signed by a member of the staff of the Commission.

Meaning of “incorporated body” and “relevant charity”

265

In this Part—

“incorporated body” means a body incorporated under section 251;

“the relevant charity”, in relation to an incorporated body, means the charity the charity trustees of which have been incorporated as that body.

Effect of provisions relating to vesting or transfer of property

266

No vesting or transfer of any property in pursuance of any provision of this Part operates as a breach of a covenant or condition against alienation or gives rise to a forfeiture.

Part 13 — Powers to amend trusts and use capital

Power to transfer all property of unincorporated charity

Introduction

267

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resolution to transfer all property

268

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notice of, and information about, resolution to transfer property

269

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General rule as to when s.268 resolution takes effect

270

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

S.268 resolution not to take effect or to take effect at later date

271

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer of property in accordance with s.268 resolution

272

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer where charity has permanent endowment: general

273

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Requirements relating to permanent endowment

274

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Charities Act 2011

Disqualification of charity trustee or trustee receiving remuneration under s.185

186

Meaning of “benefit”, “remuneration”, “services” etc.

187

Meaning of “connected person”

188

Indemnity insurance for charity trustees and trustees

Indemnity insurance for charity trustees and trustees

189

Power to amend s.189

190

Powers to relieve trustees and auditors etc. from liability

Commission’s power to relieve trustees and auditors etc. from liability

191

Court’s power to grant relief to apply to all auditors etc. of charities which are not companies

192

Part 10 — Charitable companies etc.

Introductory

Meaning of “charitable company”

193

Disclosure of charitable status by companies

Requirement to disclose charitable status

194

Civil consequences of failure to make required disclosure

195

Criminal consequences of failure to make required disclosure

196

Restrictions on alteration of objects

Alteration of objects by bodies corporate and charitable status

197

Alteration of objects by companies and Commission’s consent

198

Meaning of “benefit” in s.198(2)

199

Meaning of “connected person” in s.198(2)

200

Acts requiring Commission consent

Consent of Commission required for approval etc. by members of charitable companies

201

Consent of Commission required for certain acts of charitable company

202

Restoration of charitable company to register

Application for restoration of charitable company to register

203

Part 11 — Charitable incorporated organisations (CIOs)

CHAPTER 1 — General

Nature and constitution

Meaning of “CIO”

204

Nature

205

Constitution

206

Formation and registration of CIO

Application for CIO to be constituted and registered

207

Cases where application must or may be refused

208

Registration of CIO

209

Effect of registration of CIO

210

Name and status

Name

211

Status

212

Civil consequences of failure to disclose name or status

213

Offence of failing to disclose name or status

214

Offence of holding out that a body is a CIO

215

CHAPTER 2 — Powers, capacity and procedure etc.

Powers of CIO

216

Constitutional requirements

217

Third parties