Charities and Trustee Investment (Scotland) Act 2005

Part 1 — Charities

Chapter 1 — Office of the Scottish Charity Regulator

Application for creation of SCIO

1

• (1) There is to be an office to be known as the Office of the Scottish Charity Regulator.

• (2) There is established a body corporate, to be known as the Scottish Charity Regulator, which is to be the holder of that office.

• (3) That office-holder is referred to in this Act as “OSCR”.

• (4) OSCR has the functions conferred on it by or under this Act and any other enactment.

• (5) OSCR's general functions are—

• (a) to determine whether bodies are charities,

• (b) to keep a public register of charities,

• (c) to encourage, facilitate and monitor compliance by charities with the provisions of this Act,

• (d) to identify and investigate apparent misconduct in the administration of charities and to take remedial or protective action in relation to such misconduct, and

• (e) to give information or advice, or to make proposals, to the Scottish Ministers on matters relating to OSCR's functions.

• (6) OSCR may do anything (whether in Scotland or elsewhere) which is calculated to facilitate, or is conducive or incidental to, the performance of its functions.

• (7) Subsection (6) does not enable OSCR to do anything in contravention of any express prohibition, restriction or limitation on its powers which is contained in any enactment (including this Act).

• (8) OSCR must perform its functions in a manner that encourages equal opportunities and in particular the observance of the equal opportunity requirements.

• (9) In performing its functions OSCR must, so far as relevant, have regard to—

• (a) the principles under which regulatory activities should be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed, and

• (b) any other principle appearing to OSCR to represent best regulatory practice.

• (10) Schedule 1 makes further provision about the Scottish Charity Regulator.

Annual reports

2

• (1) As soon as practicable after the end of each financial year, OSCR must—

• (a) prepare and publish a general report on the exercise of its functions during that year,

• (b) send a copy of the report to the Scottish Ministers, and

• (c) lay a copy of the report before the Scottish Parliament.

• (1A) A general report must include information about what action OSCR has taken during that year to promote charities’ awareness and understanding of what they need to do to comply with the provisions of this Act.

• (2) A general report may include, in particular, any general recommendations which OSCR may have arising from the exercise of its functions during that year and any previous financial year.

• (3) Subject to subsection (1A), it is for OSCR to determine the form and content of a general report and by what means it is to be published.

Chapter 2 — Scottish Charity Register

The Register

Scottish Charity Register

3

• (1) OSCR must keep a register of charities to be known as the “Scottish Charity Register” (and referred to in this Act as “the Register”).

• (2) The Register is to be kept in such manner as OSCR thinks fit.

• (3) The Register must contain a separate entry for each charity entered in it setting out—

• (a) the name of the charity,

• (aa) the name of each of its charity trustees,

• (b) the principal office of the charity or, where it does not have such an office, the name and address of one of its charity trustees,

• (c) the purposes of the charity,

• (d) where the charity is a designated religious charity or a designated national collector, that fact,

• (e) where—

• (i) a direction is given under section 11(3), 12(2) , (2A) or (3), 16(6), 28(3), 30(1) , 30A(2) , 30B(2) or 31(5) to (9), or

• (ii) a notice is given under section 31(4) or 45A(2),

in relation to the charity, the fact that the direction or notice has been given and the date on which it was given,

• (f) any other information in relation to the charity which the Scottish Ministers by regulations require to be set out in the Register, and

• (g) any other information in relation to the charity which OSCR considers appropriate.

• (4) Despite subsection (3)(aa) and (b), OSCR must exclude any information of the type specified in those provisions from a charity’s entry in the Register where—

• (a) the information is the subject of an application for exclusion (whether as part of the application for the entry of a body in the Register or, subsequently, by a charity or any of its trustees), and

• (b) OSCR is satisfied that including the information in the entry would be likely to jeopardise the safety or security of any person or premises.

• (5) OSCR must, if it is satisfied that a direction or notice of a type described in subsection (3)(e) has been complied with or no longer has effect, remove reference to the direction or notice from the charity's entry.

• (6) OSCR ...—

• (a) may, from time to time, review any entry in the Register, ...

• (b) must, if it considers any information set out in a charity's entry to be inaccurate—

• (i) amend the entry accordingly, and

• (ii) notify the charity of the amendment made , and

• (c) must, if an entry is in respect of a body which has ceased to exist, remove the entry.

Applications

Application for entry in Register

4

An application for entry in the Register must—

• (a) state the name of the body making the application (the “applicant”),

• (b) state the principal office of the applicant or, where it does not have such an office, the name and address of one of the persons who, if the applicant is entered in the Register, will be its charity trustees,

• (c) be accompanied by—

• (i) a statement of the applicant's purposes,

• (ii) a copy of the applicant's constitution, and

• (iii) the applicant's most recent statement of account (if any) and any associated reports forming part of the same document, and

• (d) contain such other information, and be accompanied by such other documents, as may be—

• (i) required by regulations under section 6(1), or

• (ii) otherwise requested by OSCR.

Determination of applications

5

• (1) OSCR may enter an applicant in the Register only if it considers that the applicant meets the charity test.

• (2) OSCR must refuse to enter an applicant if—

• (a) it considers that the applicant's name falls within section 10, or

• (aa) it considers that it would not be appropriate for it to regulate the applicant because the applicant has or will have no or negligible connection to Scotland,

• (b) the application must, by virtue of regulations under section 6(1), be refused,

but must not otherwise refuse to enter an applicant which it considers meets the charity test.

• (3) Despite subsection (2)(a), where—

• (a) an applicant’s name falls within section 10 only because it is the same as, or too like, the name of a charity, and

• (b) the application for entry in the Register is being made as part of a proposed charity merger (within the meaning of section 64A(2)) involving that charity,

OSCR is entitled, but not required, to refuse to enter the applicant on the grounds of the applicant’s name.

• (4) For the purpose of subsection (2)(aa), in considering, in all the circumstances, what connection (if any) the applicant has or will have to Scotland, OSCR must have regard to the following factors—

• (a) whether the applicant has (or intends to have) a principal office in Scotland,

• (b) whether the applicant occupies (or intends to occupy) any land or premises in Scotland,

• (c) whether the applicant carries out (or intends to carry out) activities in any office, shop or similar premises in Scotland,

• (d) whether the applicant is established under the law of Scotland,

• (e) whether any of the persons who are (or are to be) concerned in the management or control of the applicant are resident in Scotland,

• (f) any other relevant factor.

• (5) The Scottish Ministers may by regulations modify this section to make provision about the factors which are or are not relevant for the purpose of subsection (2)(aa).

Applications: further procedure

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• (1) The Scottish Ministers may by regulations make such further provision in relation to the procedure for applying and determining applications for entry in the Register (including applications under section 54(1), 56(1) and 59(1)) as they think fit.

• (2) Such regulations may in particular make provision about—

• (a) information and documents which must be specified in or accompany an application,

• (b) the form and manner in which applications must be made,

• (c) the period within which OSCR must make a decision on an application, and

• (d) circumstances in which OSCR must refuse to enter a body in the Register.

The charity test

The charity test

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• (1) A body meets the charity test if—

• (a) its purposes consist only of one or more of the charitable purposes, and

• (b) it provides (or, in the case of an applicant, provides or intends to provide) public benefit in Scotland or elsewhere.

• (2) The charitable purposes are—

• (a) the prevention or relief of poverty,

• (b) the advancement of education,

• (c) the advancement of religion,

• (d) the advancement of health,

• (e) the saving of lives,

• (f) the advancement of citizenship or community development,

• (g) the advancement of the arts, heritage, culture or science,

• (h) the advancement of public participation in sport,

• (i) the provision of recreational facilities, or the organisation of recreational activities, with the object of improving the conditions of life for the persons for whom the facilities or activities are primarily intended,

• (j) the advancement of human rights, conflict resolution or reconciliation,

• (k) the promotion of religious or racial harmony,

• (l) the promotion of equality and diversity,

• (m) the advancement of environmental protection or improvement,

• (n) the relief of those in need by reason of age, ill-health, disability, financial hardship or other disadvantage,

• (o) the advancement of animal welfare,

• (p) any other purpose that may reasonably be regarded as analogous to any of the preceding purposes.

• (3) In subsection (2)—

• (a) in paragraph (d), “the advancement of health” includes the prevention or relief of sickness, disease or human suffering,

• (b) paragraph (f) includes—

• (i) rural or urban regeneration, and

• (ii) the promotion of civic responsibility, volunteering, the voluntary sector or the effectiveness or efficiency of charities,

• (c) in paragraph (h), “sport” means sport which involves physical skill and exertion,

• (d) paragraph (i) applies only in relation to recreational facilities or activities which are—

• (i) primarily intended for persons who have need of them by reason of their age, ill-health, disability, financial hardship or other disadvantage, or

• (ii) available to members of the public at large or to male or female members of the public at large,

• (e) paragraph (n) includes relief given by the provision of accommodation or care, and

• (f) for the purposes of paragraph (p), the advancement of any philosophical belief (whether or not involving belief in a god) is analogous to the purpose set out in paragraph (c).

• (4) A body which falls within paragraphs (a) and (b) of subsection (1) does not, despite that subsection, meet the charity test if—

• (a) its constitution allows it to distribute or otherwise apply any of its property (on being wound up or at any other time) for a purpose which is not a charitable purpose,

• (b) its constitution expressly permits the Scottish Ministers or a Minister of the Crown to direct or otherwise control its activities, or

• (c) it is, or one of its purposes is to advance, a political party.

• (5) The Scottish Ministers may by order disapply either or both of paragraphs (a) and (b) of subsection (4) in relation to any body or type of body specified in the order.

Public benefit

8

• (1) No particular purpose is, for the purposes of establishing whether the charity test has been met, to be presumed to be for the public benefit.

• (2) In determining whether a body provides or intends to provide public benefit, regard must be had to—

• (a) how any—

• (i) benefit gained or likely to be gained by members of the body or any other persons (other than as members of the public), and

• (ii) disbenefit incurred or likely to be incurred by the public,

in consequence of the body exercising its functions compares with the benefit gained or likely to be gained by the public in that consequence, and

• (b) where benefit is, or is likely to be, provided to a section of the public only, whether any condition on obtaining that benefit (including any charge or fee) is unduly restrictive.

Guidance on charity test

9

OSCR must, after consulting representatives of the charitable sector and such other persons as it thinks fit, issue guidance on how it determines whether a body meets the charity test.

Charity names

Objectionable names

10

• (1) A body's name falls within this section if it is—

• (a) the same as, or too like, the name or working name of a charity,

• (b) likely to mislead the public as to the true nature of the purposes of the body or of the activities which it carries on, or intends to carry on, in pursuit of those purposes,

• (c) likely to give the impression that the body is connected in some way to the Scottish Administration, Her Majesty's Government in the United Kingdom or any local authority, or with any other person, when it is not so connected, or

• (d) offensive.

• (2) The reference in subsection (1)(b) to a body's purposes are—

• (a) in the case of an applicant, the purposes set out in the statement accompanying its application,

• (b) in the case of a charity, the purposes set out in its entry in the Register, and

• (c) in the case of an SCIO proposed in an application under section 54(1), 56(1) or 59(1), the purposes set out in the SCIO's proposed constitution accompanying the application.

• (3) Nothing in this section, or in any of sections 5(2)(a), 11(4), 12(3), 54(4)(a) or 57(3)(a), requires OSCR to undertake any investigation into the working name of a charity.

Change of name

11

• (1) A charity may change its name only with OSCR's consent.

• (2) A charity which proposes to change its name must ... give notice to OSCR specifying its proposed new name.

• (3) Unless OSCR, within 28 days of the date on which a notice is given under subsection (2) —

• (a) refuses its consent, or

• (b) directs the charity not to change its name to that proposed new name for a period of not more than 6 months specified in the direction,

OSCR is to be taken as having given its consent.

• (3A) A direction under subsection (3)(b)—

• (a) may be revoked at any time,

• (b) may be varied, but not so as to have effect for a period of more than 6 months from the date on which it is given.

• (3B) Where OSCR gives such a direction it must, after making such inquiries as it thinks fit—

• (a) give its consent, whether or not subject to conditions, or

• (b) refuse its consent.

• (4) OSCR may refuse to consent to a charity changing its name only where

• (a) it considers that the proposed new name falls within section 10 , or

• (b) it is unable, after making reasonable inquiries, to satisfy itself that the proposed new name does not fall within section 10.

• (5) OSCR may, at the request of a charity, grant consent to a different proposed new name than that specified by the charity in the notice given by it under subsection (2).

Power of OSCR to require charity to change name

12

• (1) A charity may, if it considers that the name or working name of another charity is the same as or too like its name or working name, request OSCR to conduct a review.

• (2) OSCR must, if satisfied following such a review that the names of two charities are too alike, direct either one or both of the charities to change its name.

• (2A) OSCR may, if satisfied following such a review that the working name of a charity (“charity A”) is the same as or too like the name or working name of another charity (“charity B”), as appropriate—

• (a) direct charity B to change its name,

• (b) direct either one or both of the charities to stop using its working name within such period as may be specified in the direction.

• (3) At any other time—

• (a) where OSCR considers that a charity's name falls within section 10, it must direct the charity to change its name,

• (b) where OSCR considers that a charity's working name is objectionable, it may direct the charity to stop using that working name within such period as may be specified in the direction.

• (3A) But, for the purposes of subsection (3)(a), where—

• (a) a charity's name falls within section 10 only because it is the same as, or too like, the name of another charity, and

• (b) one of the charities was entered in the Register with that name by virtue of section 5(3),

OSCR may direct either one or both of the charities to change its name under subsection (3)(a) only if OSCR is satisfied that it is no longer appropriate for the names to be the same or so alike.

• (3B) A direction under this section—

• (a) may be revoked at any time,

• (b) may be varied, but only by extending the period specified in it.

• (4) Section 11 applies in relation to a change of name in compliance with a direction under this section to change name (and the charity directed must give notice of its proposed new name under subsection (2) of that section within such period as may be specified in the direction).

• (5) OSCR must remove from the Register any charity which fails to comply with a direction to change name under this section.

• (6) For the purposes of subsection (3)(b), a charity’s working name is objectionable where it would, if it were the charity’s name, fall within section 10(1).

References to charitable status

References to charitable status

13

• (1) A body entered in the Register may refer to itself as a “charity”, a “charitable body”, a “registered charity” or a “charity registered in Scotland”.

• (2) If such a body is established under the law of Scotland, or is managed or controlled wholly or mainly in or from Scotland, it may also refer to itself as a “Scottish charity” or a “registered Scottish charity”.

• (3) A body which refers to itself in any of the ways described in subsection (1) is to be treated as representing itself as a body entered in the Register.

• (4) A body which refers to itself in any of the ways described in subsection (2) is to be treated as representing itself—

• (a) as a body entered in the Register, and

• (b) as being established under the law of Scotland or managed or controlled wholly or mainly in or from Scotland.

Exception for certain bodies not in Register

14

A body which is not entered in the Register may, despite section 13, refer to itself as a “charity” without being treated as representing itself as a charity if, and only if—

• (a) it is—

• (i) established under the law of a country or territory other than Scotland,

• (ii) entitled to refer to itself as a “charity” (by any means or in any language) in that country or territory, and

• (iii) managed or controlled wholly or mainly outwith Scotland,

• (b) it does not—

• (i) occupy any land or premises in Scotland, or

• (ii) carry out activities in any office, shop or similar premises in Scotland, and

• (c) in making that reference, it also refers to being established under the law of a country or territory other than Scotland.

References in documents

15

• (1) The Scottish Ministers may by regulations require each body entered in the Register to state, in legible characters—

• (a) that it is a charity,

• (b) such other information as may be specified in the regulations,

on such documents issued or signed on behalf of the charity as may be so specified.

• (2) Such regulations may—

• (a) exempt charities, or charities of a particular type, from any of the requirements imposed by the regulations,

• (b) provide that any statement required by them may, in the case of documents which are otherwise wholly or mainly in a language other than English, be made in that other language.

• (3) For the purposes of this section, a reference to a document issued or signed on behalf of the charity includes a reference to a web page on a website operated by or on behalf of the charity.

Changes

Changes which require OSCR’s consent

16

• (1) A charity may take any action set out in subsection (2) only with OSCR's consent and in accordance with any conditions attached to any such consent.

• (2) Those actions are—

• (a) amending its constitution so far as it relates to its purposes,

• (b) amalgamating with another body,

• (c) winding itself up or dissolving itself,

• (d) applying to the court in relation to any action set out in paragraphs (a) to (c).

• (3) Subsection (1) does not apply in relation to any action—

• (a) in pursuance of an approved reorganisation scheme, or

• (b) for which OSCR's consent is required by virtue of any other enactment.

• (4) Where a charity proposes to take any action set out in subsection (2) it must ... give notice to OSCR of the proposal ... (unless the action is one for which, by virtue of subsection (3), consent under subsection (1) is not required).

• (5) In the case of an action set out in subsection (2)(a), the charity must not proceed unless and until OSCR has given its consent.

• (6) In any other case, unless OSCR, within 28 days of the date on which notice is given under subsection (4)—

• (a) refuses its consent, or

• (b) directs the charity not to take the action for a period of not more than 6 months specified in the direction,

OSCR is to be taken as having consented to it.

• (7) A direction under subsection (6)(b)—

• (a) may be revoked at any time,

• (b) may be varied, but not so as to have effect for a period of more than 6 months from the date on which it is given.

• (8) Where OSCR gives such a direction it must, after making such inquiries as it thinks fit—

• (a) give its consent, whether or not subject to conditions, or

• (b) refuse its consent.

Notification of other changes

17

• (1) A charity must give OSCR notice of—

• (a) any change in—

• (i) the principal office of the charity, or

• (ii) where it does not have such an office, the name or address specified in the Register in accordance with section 3(3)(b) (or which would, but for section 3(4), be so specified),

• (b) any change in any other details set out in its entry in the Register (or which would, but for section 3(4), be so specified),

• (ba) any change in relation to its charity trustees which alters the answer to a question specified by OSCR under section 66A(3),

• (c) any change to its constitution,

• (d) any action set out in section 16(2)(b) to (d) which the charity has taken,

• (e) any administration order or an order for winding up made by the court in respect of the charity,

• (f) the appointment of a receiver in respect of any of the charity's property,

setting out the date on which the change, action, order or appointment took effect.

• (2) Paragraphs (c) and (d) of subsection (1) are subject to section 16.

• (3) A notice under any of paragraphs (a) to (d) of subsection (1) must be given within 3 months of the date of the change or action to which it relates.

• (4) A notice under paragraph (e) or (f) of subsection (1) must be given within 1 month of the date of the order or appointment to which it relates.

Removal from Register

Removal from Register

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OSCR must, within 28 days of the date on which it receives an application from a charity for removal from the Register—

• (a) remove the charity from the Register, and

• (b) give it notice of the date on which it is removed.

Removal from Register: protection of assets

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• (1) A body removed from the Register (under section 18 or otherwise) continues to be under a duty to apply its protected charitable assets—

• (a) in accordance with its charitable purposes as set out in its entry in the Register immediately before its removal (its “most recent purposes”), and

• (b) to provide public benefit in Scotland or elsewhere.

• (1A) In this section, “protected charitable assets” means—

• (a) any property acquired, or any property representing property acquired, before the body was removed from the Register,

• (b) any property representing income which accrued before the body was removed from the Register, and

• (c) the income from any such property.

• (1B) The application of protected charitable assets in accordance with a body’s most recent purposes is not to be presumed to be for the public benefit.

• (1C) In determining whether a body is applying its protected charitable assets for public benefit, section 8(2) applies subject to the modifications in subsection (1D).

• (1D) The modifications are that—

• (a) in the opening words, the reference to determining whether a body provides or intends to provide public benefit is to be read as if it were a reference to determining whether a body is applying its protected charitable assets for public benefit,

• (b) in the closing words of paragraph (a), the reference to the consequence of the body exercising its functions is to be read as if it were a reference to the consequence of the body applying its protected charitable assets.

• (2) Despite the removal of a body from the Register, the provisions of this Part set out in subsection (3) continue to apply to the body, but only so far as they relate to its protected charitable assets.

• (3) Those provisions are—

• (a) in Chapter 4—

• sections 28 and 29,

• section 31(1) to (3) and (5) to (9),

• section 32,

• section 33(2) to (5),

• section 34(1) to (3), (5)(a) to (c) and (f) to (h), (7) and (10)(b), and

• section 37, and

• (b) in Chapter 6, sections 44 and 45.

• (4) The Court of Session may, on an application by OSCR, approve a scheme prepared by OSCR in accordance with regulations made by the Scottish Ministers for the transfer to a charity specified in the scheme of any protected charitable assets which a body removed from the Register is required to apply in accordance with subsection (1).

• (4A) OSCR must consult the Scottish Housing Regulator before making an application under subsection (4) in relation to a registered social landlord (within the meaning of the Housing (Scotland) Act 2010 (asp 17)).

• (5) The court may approve such a scheme only if it is satisfied—

• (a) that it is necessary or desirable to act for the purpose of protecting the protected charitable assets to which the scheme relates or securing a proper application of such protected charitable assets for the charitable purposes which were set out in the body's entry in the Register immediately before its removal, and

• (b) that those purposes would be better achieved by transferring the protected charitable assets to a charity.

• (6) The court may approve a scheme under subsection (5) subject to modifications.

• (7) A charity receiving protected charitable assets in pursuance of a scheme approved under subsection (5) may apply the protected charitable assets for its purposes as it thinks fit.

• (8) The Scottish Ministers may by order disapply subsections (1) to (7) in relation to any property specified in the order.

• (9) An order under subsection (8) may make provision in relation to particular items or types of property or in relation to property owned by particular persons.

• (10) It is not competent for such order to make provision in relation to property which is not owned by a charity on the day the order takes effect.

Chapter 3 — Co-operation and information

Co-operation

Co-operation

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• (1) OSCR must, so far as consistent with the proper exercise of its functions, seek to secure co-operation between it and other relevant regulators.

• (2) A “relevant regulator” is a public body or office-holder with functions (whether exercisable in the United Kingdom or elsewhere) which are—

• (a) similar to those of OSCR, or

• (b) conferred by any enactment and designed to allow the body or office-holder to regulate persons for other purposes.

• (3) OSCR and any person authorised by virtue of section 38(1) or (2) to exercise functions under this Act must, so far as consistent with the proper exercise of their respective functions, co-operate with each other for the purpose of enabling or assisting the person to exercise those functions under this Act.

• (4) Co-operation does not include the sharing of information which OSCR or any person with whom it is co-operating is prevented by law from disclosing.

Information about charities

Public access to Register

21

• (1) OSCR must make the Register available for public inspection—

• (a) at all reasonable times at its principal office,

• (b) at such other places as it thinks fit, and

• (c) otherwise as it thinks fit.

• (2) It is for OSCR to determine the form and manner in which the Register is made available; but in doing so OSCR must ensure that the information in the Register is made reasonably obtainable.

• (3) OSCR must publicise the arrangements which it makes in pursuance of subsection (1).

• (4) OSCR may charge such fee (not exceeding the cost of supply) as it thinks fit for providing information under any arrangements it makes under subsection (1)(b) and (c).

Power of OSCR to obtain information from charities

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• (1) OSCR may by notice require any charity to provide to it—

• (a) any document, or a copy of or extract from any document,

• (b) documents of any type, or copies of or extracts from such documents,

• (c) other information or explanation,

which OSCR requires in relation to the charity's entry in the Register.

• (2) The notice must specify—

• (a) the documents, type of documents, copies, extracts, information or explanation which the charity is to provide to OSCR, and

• (b) the date (which must be at least 14 days after the date on which the notice is given) by which the charity must do so.

• (3) Subsection (1) does not authorise OSCR to require the disclosure of anything which a charity would be entitled to refuse to disclose on grounds of confidentiality in proceedings in the Court of Session.

Entitlement to information about charities

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• (1) A person who requests a charity to provide a copy of its—

• (a) constitution,

• (b) latest statement of account and independent report on accounts prepared under section 44,

is, if the request is reasonable, entitled to be given that copy constitution or copy statement of account and independent report on accounts (if any) by the charity ....

• (1A) Where a person is entitled to a copy document under subsection (1), the person is entitled to be given it—

• (a) within 28 days of the date on which the request is received by the charity, and

• (b) in such form as the person may reasonably request.

• (2) A charity may charge such fee as it thinks fit for complying with such a request; but such a fee must not exceed the cost of supplying the document requested or, if less, any maximum fee which the Scottish Ministers may by order prescribe.

• (3) The Scottish Ministers may by order exempt from the duty set out in subsection (1) any charities which meet such criteria as may be specified in the order.

Sharing information

Disclosure of information by and to OSCR

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• (1) OSCR may disclose any information to any public body or office-holder (in Scotland, in any other part of the United Kingdom or in a country or territory outside the United Kingdom)—

• (a) for any purpose connected with the exercise of OSCR's functions, or

• (b) for the purpose of enabling or assisting the public body or office-holder to exercise any functions.

• (2) Any person to whom this subsection applies may disclose any information to OSCR for the purpose of enabling or assisting OSCR to exercise any functions.

• (3) Subsection (2) applies to—

• (a) any office-holder in the Scottish Administration,

• (b) the Scottish Parliamentary Corporate Body,

• (c) any local authority,

• (d) any constable, and

• (e) any other Scottish public authority with mixed functions or no reserved functions.

• (4) A power to disclose information under subsection (1) or (2) is, unless section 25 otherwise provides, subject to any obligation as to secrecy or other restriction on disclosure of the information however imposed.

Removal of restrictions on disclosure of certain information

25

• (1) No obligation as to secrecy or other restriction on disclosure of information however imposed prevents—

• (a) OSCR from disclosing any information to a designated body for—

• (i) any purpose connected with the exercise of OSCR's functions,

• (ii) the purpose of enabling or assisting that body to exercise any functions,

• (b) a designated body from disclosing any information to OSCR for the purpose of enabling or assisting OSCR to exercise any functions,

• (ba) OSCR from disclosing any information to a designated religious charity for—

• (i) any purpose connected with the exercise of OSCR’s functions,

• (ii) the purpose of enabling or assisting that charity in relation to the exercise of any supervisory or disciplinary functions in respect of the component parts of the charity,

• (bb) a designated religious charity from disclosing any information to OSCR for the purpose of enabling or assisting OSCR to exercise any functions,

• (c) a charity trustee of a charity from disclosing any information about that charity to OSCR for the purpose of enabling or assisting OSCR to exercise any functions,

• (d) any person from disclosing any information to OSCR about any matter in respect of which the person is required or authorised by section 46 to make a report to OSCR, or

• (e) a relevant financial institution from disclosing any information to OSCR for the purpose of enabling or assisting OSCR to exercise any functions under section 47.

• (2) The Scottish Ministers may, by order, designate—

• (a) for the purposes of paragraph (a) of subsection (1), any public body or office-holder in Scotland, in any other part of the United Kingdom or in a country or territory outside the United Kingdom,

• (b) for the purposes of paragraph (b) of that subsection, any Scottish public authority with mixed functions or no reserved functions,

and references in that subsection to a “designated body” are to be construed accordingly.

• (3) Nothing in this section authorises the making of a disclosure that contravenes the data protection legislation (but in determining whether a disclosure would do so, the provision made in this Act enabling or requiring the disclosure of information as mentioned in paragraphs (a) to (e) of subsection (1) is to be taken into account).

• (4) In this section, “the data protection legislation” has the meaning given by section 3(9) of the Data Protection Act 2018.

Supplemental

False or misleading information etc.

26

• (1) It is an offence for a person to provide any information or explanation to OSCR or any other person if—

• (a) the person providing the information or explanation knows it to be, or is reckless as to whether it is, false or misleading in a material respect, and

• (b) the information or explanation is provided—

• (i) in purported compliance with a requirement by or under this Act, or

• (ii) in other circumstances in which the person providing it knows, or could reasonably be expected to know, that it would be used by OSCR, or provided to OSCR for use, in connection with the exercise of its functions.

• (2) It is an offence for a person deliberately to alter, suppress, conceal or destroy any document (or any part of a document) which the person is, or which that person knows any other person is, required by or under this Act to provide to OSCR.

• (3) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale or imprisonment for a period not exceeding 6 months, or to both.

Disclosure of information: entitlement under other enactments etc.

27

Sections 21 to 25 are without prejudice to any entitlement to receive or disclose information under any enactment or otherwise.

Chapter 4 — Supervision of charities etc.

Inquiries

Inquiries about charities etc.

28

• (1) OSCR may at any time make inquiries, either generally or for particular purposes, with regard to—

• (a) a charity,

• (b) a body controlled by a charity (or by two or more charities, when taken together),

• (c) a body which is not entered in the Register which appears to OSCR to represent itself as a charity (or which would, but for section 14, so appear),

• (d) a person not falling within paragraph (a) to (c) who appears to OSCR to act, or to represent itself as acting, for or on behalf of—

• (i) a charity, or

• (ii) a body falling within paragraph (b) or (c),

• (e) a person who appears to OSCR to represent a body as a charity despite that body not being entered in the Register,

• (f) any particular type of charity, of body falling within paragraph (b) or (c), or of person falling within paragraph (d) or (e).

• (2) OSCR may make inquiries under subsection (1) of its own accord or on the representation of any person.

• (2A) It does not matter whether a charity, body or person continues to fall within a paragraph of subsection (1), or continues to exist, for OSCR to be able to make inquiries under that subsection (but see subsection (4A)).

• (3) OSCR may direct any charity, body or person with regard to which it is making inquiries under subsection (1) not to undertake activities specified in the direction for such period of not more than 6 months as is specified in the direction.

• (4) A direction under subsection (3) given to a person falling within paragraph (d) or (e) of subsection (1) may be given only in relation to activities which that person undertakes for or on behalf of the charity or body to which the inquiries relate.

• (4A) Where inquiries are made by virtue of subsection (2A) into a charity, body or person which no longer falls within a paragraph of subsection (1)—

• (a) the inquiries must relate to the period or periods in which the charity, body or person fell within one or more paragraphs of subsection (1), and

• (b) no direction may be given under subsection (3),

unless the inquiries or, as the case may be, the direction relates to the application of protected charitable assets (see section 19).

• (5) A direction under subsection (3)—

• (a) may be revoked at any time,

• (b) may be varied, but not so as to have effect for a period of more than 6 months from the date on which it is given.

• (6) A person who, without reasonable excuse, refuses or fails to comply with a direction under subsection (3) is guilty of an offence.

• (7) A person guilty of an offence under subsection (6) is liable on summary conviction to a fine not exceeding level 4 on the standard scale or imprisonment for a period not exceeding 3 months, or to both.

Power of OSCR to obtain information for inquiries

29

• (1) OSCR may ... require any person to provide to it—

• (a) any document, or a copy of or extract from any document,

• (b) documents of any type, or copies of or extracts from such documents,

• (c) any information or explanation,

which OSCR considers necessary for the purposes of inquiries under section 28.

• (2) Where OSCR makes such a requirement, it must give a notice to the person specifying—

• (a) the documents, type of documents, copies, extracts, information or explanation which the person is to provide to OSCR,

• (b) the date (which must be at least 14 days after the date on which the notice is given) by which the person must do so, and

• (c) the effect of subsection (6).

• (2A) But OSCR must not give notice under subsection (2) unless and until the decision to make the requirement under subsection (1) has effect (see section 73(3)).

• (3) Subsection (1) does not authorise OSCR to require the disclosure of anything which a person would be entitled to refuse to disclose on grounds of confidentiality in proceedings in the Court of Session.

• (4) OSCR must not disclose any document, information or explanation provided in response to a requirement under subsection (1) except for the purposes of the inquiries in connection with which the requirement was made.

• (5) OSCR may pay to any person a sum in respect of expenses reasonably incurred by the person in complying with a requirement under subsection (1).

• (6) A person who, without reasonable excuse, refuses or fails to comply with a requirement under subsection (1) is guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale or imprisonment for a period not exceeding 3 months, or to both.

Removal from Register of charity which no longer meets charity test

30

• (1) Where it appears to OSCR, as a result of inquiries under section 28, that a charity no longer meets the charity test it must—

• (a) direct the charity to take, within such period as may be specified in the direction, such steps as OSCR considers necessary for the purposes of meeting the charity test, or

• (b) remove the charity from the Register.

• (2) Steps specified in a direction under subsection (1)(a) may include applying to OSCR for approval under section 39 of a reorganisation scheme in relation to the charity's constitution.

• (2A) The power of OSCR to give a direction under subsection (1)(a) includes the power to—

• (a) vary the direction, but only by—

• (i) extending the time period specified in the direction, or

• (ii) removing steps which the charity is required to take, or

• (b) revoke such a direction.

• (3) OSCR must, if a charity fails to comply with a direction under subsection (1)(a), remove the charity from the Register.

Powers of OSCR following inquiries

31

• (1) Subsections (4), (6) and (7) apply where it appears to OSCR, as a result of inquiries under section 28—

• (a) that there has been misconduct in the administration of—

• (i) a charity, or

• (ii) a body controlled by a charity, or

• (b) that it is necessary or desirable to act for the purpose of protecting the property of a charity or securing a proper application of such property for its purposes.

• (2) Subsections (5) to (7) apply where it appears to OSCR, as a result of inquiries under section 28—

• (a) that a body which is not a charity is being or has been represented as a charity, or

• (b) that a charity which is not entitled to refer to itself in either of the ways described in section 13(2) is being or has been represented as being established under the law of Scotland or managed or controlled wholly or mainly in or from Scotland.

• (3) Subsections (8) and (9) apply where it appears to OSCR, as a result of inquiries under section 28, that there is or has been misconduct by a person falling within section 28(1)(d) in any activity which the person undertakes for or on behalf of the charity or body referred to in that provision.

• (4) OSCR may, by notice, suspend any person concerned in the management or control of the charity or body who appears to it to—

• (a) have been responsible for or privy to the misconduct,

• (b) have contributed to, or facilitated, the misconduct, or

• (c) be unable or unfit to perform that person's functions in relation to the property of the charity or body.

• (5) OSCR may direct—

• (a) the body representing itself as a charity,

• (b) the person representing the body as a charity,

• (c) the charity representing itself as being established under the law of Scotland or managed or controlled wholly or mainly in or from Scotland, or, as the case may be

• (d) the person representing the charity as being established under the law of Scotland or managed or controlled wholly or mainly in or from Scotland,

to stop doing so.

• (6) OSCR may give a direction restricting the transactions which may be entered into, or the nature or amount of the payments which may be made, in the administration of the charity or body without OSCR's consent.

• (7) OSCR may direct any relevant financial institution or other person holding property on behalf of the charity or body or of any person concerned in its management or control not to part with the property without OSCR's consent.

• (8) OSCR may direct the person—

• (a) to cease acting, or representing itself as acting, for or on behalf of the charity or body in any activity specified in the direction,

• (b) to pay to the charity or body, within such period as the direction may specify, any sums which it has collected for the charity or body and which are held by it or by any relevant financial institution or other person on its behalf, after deducting any sums payable to the person or any other person under an agreement with the charity or body.

• (9) OSCR may direct any relevant financial institution or other person holding property which OSCR considers to be, or to represent, sums collected for the charity or body not to part with the property without OSCR's consent.

• (10) OSCR's power to suspend a person by giving notice under subsection (4)(a) or (b) does not apply if OSCR considers that the person has acted honestly and reasonably in relation to the misconduct concerned and ought fairly to be excused.

Suspensions and directions: procedure

32

• (1) A suspension under subsection (4) and a direction under any of subsections (5) to (9) of section 31—

• (a) has effect for such period of not more than 6 months as is specified in the suspension or direction,

• (b) may be revoked at any time,

• (c) may be varied, but not so as to have effect for a period of more than 6 months from the date on which the suspension or direction first has effect.

• (2) Where such a suspension has been made or direction has been given,

• (a) a further suspension or direction may be made or given under section 31 (in addition to any direction that may be given under section 30B), but

• (b) the further suspension or direction under section 31 ceases to have effect on the same date as the original suspension or direction (unless stated to cease to have effect earlier).

• (3) A copy of the notice given under section 72 in respect of a—

• (a) suspension under subsection (4) of section 31, or

• (b) direction under subsection (5)(b) or (d) or (8) of that section,

must be given to the charity or body in question.

• (4) A copy of the notice given under section 72 in respect of a direction under subsection (7) or (9) of that section must be given to the person directed.

• (5) A person who, without reasonable excuse—

• (a) contravenes a suspension under subsection (4) of section 31, or

• (b) refuses or fails to comply with a direction under any of subsections (5) to (9) of that section,

is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale or imprisonment for a period not exceeding 6 months, or to both.

Reports on inquiries

33

• (1) OSCR must prepare a report of the subject matter of inquiries made under section 28 if—

• (a) as a result of the inquiries it—

• (i) gives a direction, or removes a charity from the Register, under section 30,

• (ia) gives a direction under section 30A,

• (ib) gives a direction under section 30B,

• (ii) suspends a person under subsection (4) of section 31, or

• (iii) gives a direction under any of subsections (5) to (9) of that section, or

• (b) in any other case, it is requested to do so by the person in respect of whom the inquiries were made and it has not previously prepared a report of the subject matter of those inquiries under this subsection or subsection (2).

• (2) OSCR may prepare a report of the subject matter of any other inquiries under section 28.

• (3) A report prepared under this section may relate to two or more inquiries.

• (4) Apart from identifying the person in respect of whom inquiries were made, a report under this section must not—

• (a) mention the name of any person, or

• (b) contain any particulars which, in OSCR's opinion—

• (i) are likely to identify any person, and

• (ii) can be omitted without impairing the effectiveness of the report,

unless OSCR considers it is necessary to do so.

• (5) OSCR must—

• (a) send a copy of a report prepared under subsection (1) to the person in respect of whom the inquiries were made, and

• (b) publish a report prepared under this section or such other statement of the result of inquiries made under section 28 as OSCR thinks fit in such manner as OSCR thinks fit.

Powers of Court of Session

Powers of Court of Session

34

• (1) Where, on an application by OSCR, it appears to the Court of Session—

• (a) that there is or has been misconduct in the administration of—

• (i) a charity, or

• (ii) a body controlled by a charity (or by two or more charities, when taken together), or

• (b) that it is necessary or desirable to act for the purpose of protecting the property of a charity or securing a proper application of such property for its purposes,

the court may exercise any of the powers set out in subsection (5)(a) and (c) to (g).

• (2) Where, on an application by OSCR, it appears to the Court of Session that a body which is not a charity is or has been representing itself as a charity, the court may exercise any of the powers set out in subsection (5)(b) to (g).

• (3) Where, on an application by OSCR, it appears to the Court of Session that a person is or has been representing a body which is not a charity as a charity, the court may exercise any of the powers set out in subsection (5)(f) to (h).

• (4) Where, on an application by OSCR, it appears to the Court of Session that a charity which is not entitled to refer to itself in either of the ways described in section 13(2) is being or has been represented as being established under the law of Scotland or managed or controlled wholly or mainly in or from Scotland, the court may exercise any of the powers set out in subsections (5)(f), (g) and (i).

• (5) Those powers are power to—

• (a) interdict (whether temporarily or permanently) the charity or body from such action as the court thinks fit,

• (b) interdict (whether temporarily or permanently) the body from representing itself as a charity or from such other action as the court thinks fit,

• (c) appoint a judicial factor (whether temporarily or permanently) to manage the affairs of the charity or body,

• (d) where the charity or body is a trust, appoint a trustee,

• (e) suspend or remove any person concerned in the management or control of the charity or body,

• (ea) make an order declaring that any person who was concerned in the management or control of a charity or body is to be treated, for the purposes of section 69(2)(c) (disqualification from being charity trustee) and section 70ZA (record of persons removed from office) as having been removed from being concerned in the management or control of the charity or body, notwithstanding that—

• (i) the person is no longer concerned in the management or control of the charity or body,

• (ii) the body is no longer a charity,

• (iii) the body is no longer controlled by a charity (or charities), or

• (iv) the charity or body has ceased to exist,

• (f) order any relevant financial institution or other person holding property on behalf of the charity or body or of any person concerned in its management or control not to part with the property without the court's consent,

• (g) make an order restricting the transactions which may be entered into, or the nature or amount of the payments which may be made, in the administration of the charity or body without the court's consent,

• (h) interdict (whether temporarily or permanently) the person from representing the body as a charity or from such other action as the court thinks fit,

• (i) interdict (whether temporarily or permanently) the charity or, as the case may be, the person from representing the charity as being established under the law of Scotland or managed or controlled wholly or mainly in or from Scotland or from such other action as the court thinks fit.

• (6) Where the court appoints a trustee in pursuance of subsection (5)(d), section 22 of the Trusts (Scotland) Act 1921 (c. 58) applies as if the trustee had been appointed under that section.

• (7) The power in subsection (5)(g) applies despite anything in the constitution of the charity or body.

• (8) Subsection (9) applies where, on an application by OSCR, it appears to the Court of Session that there is or has been misconduct by a person falling within section 28(1)(d) in any activity which the person undertakes for or on behalf of the charity or body referred to in that provision.

• (9) The court may—

• (a) interdict (whether temporarily or permanently) the person from acting, or representing itself as acting, on behalf of the charity or body,

• (b) order the person to pay to the charity or body any sums which it has collected for the charity or body and which are held by it, any relevant financial institution or other person holding money on its behalf, after deducting any sums payable to the person or any other person under an agreement with the charity or body,

• (c) order any relevant financial institution or other person holding property which the court considers to be, or to represent, sums collected for the charity or body not to part with the property without the court's consent.

• (10) The court may—

• (a) recall the suspension of a person in pursuance of subsection (5)(e),

• (b) vary or recall an order in pursuance of subsection (5)(f) or (g) or under subsection (9)(b) or (c).

Transfer schemes

35

• (1) The Court of Session may, on an application by OSCR, approve a scheme prepared by OSCR in accordance with regulations made by the Scottish Ministers for the transfer to a charity specified in the scheme of any assets of—

• (a) another charity,

• (b) a body which is controlled by a charity (or by two or more charities, when taken together),

• (c) a body which is not a charity but which is or has been representing itself as a charity.

• (2) The court may approve a scheme in relation to a charity only if it is satisfied—

• (a) that there is or has been misconduct in the administration of the charity,

• (b) that it is necessary or desirable to act for the purpose of protecting the property of the charity or securing a proper application of such property for its purposes, and

• (c) that the charity's purposes would be better achieved by transferring its assets to another charity.

• (3) The court may approve a scheme in relation to a body falling with paragraph (b) of subsection (1) only if it is satisfied—

• (a) that there is or has been misconduct in the administration of the body or any of the charities which control it,

• (b) that it is necessary or desirable to act for the purpose of protecting the property of the body or any such charity, and

• (c) that the transfer provided for by the scheme is reasonable.

• (4) The court may approve a scheme in relation to a body falling within paragraph (c) of subsection (1) only if it is satisfied—

• (a) that the body falls within that paragraph, and

• (b) that the transfer provided for by the scheme is reasonable.

• (5) The court may approve a scheme under this section subject to modifications.

• (6) A charity receiving property in pursuance of a scheme approved under this section may apply that property for its purposes as it thinks fit.

Powers in relation to English and Welsh charities

36

• (1) Subsection (2) applies where the Charity Commission for England and Wales informs OSCR that a relevant financial institution or other person in Scotland holds moveable property on behalf of a body—

• (a) which is registered as a charity in England and Wales in accordance with section 30 of the Charities Act 2011, or

• (b) which, by virtue of subsection (2) of that section, is not required to register as a charity under that section.

• (2) The Court of Session may, on an application by OSCR, make an order requiring the relevant financial institution or other person not to part with the property without the court's consent.

• (3) An order under subsection (2) may be made subject to conditions and may be varied or recalled.

• (4) Where the court has made an order under subsection (2) and, on an application by OSCR, it is satisfied as to the matters set out in subsection (5) it may transfer the property to a charity specified in the application—

• (a) which has purposes which are the same as or which resemble closely the purposes of the body whose property is transferred, and

• (b) which has intimated that it is prepared to receive the property.

• (5) Those matters are—

• (a) that there has been misconduct in the administration of the body, and

• (b) that it is necessary or desirable to transfer the property for the purpose of protecting it or securing a proper application of it for the purposes of the body from which it is to be transferred.

Expenses

37

In proceedings before it under sections 34 to 36 in relation to a charity, the Court of Session may, instead of awarding expenses against the charity, award expenses against a charity trustee of the charity or against any two or more of its charity trustees jointly and severally.

Supplemental

Delegation of functions

38

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) OSCR may authorise any Scottish public authority with mixed functions or no reserved functions to exercise any of the OSCR's functions under sections 28 to 35 (other than section 30) and section 70A in so far as they are exercisable in relation to—

• (a) such charities or bodies, or types of charity or body, as OSCR may specify in the authorisation, and

• (b) persons acting for or on behalf of those charities or bodies.

• (3) Such an authorisation may be made only if the authorised person has other regulatory functions conferred on it by an enactment in relation to the charities or types of charity in respect of which the authorisation is made.

• (4) OSCR must send a copy of such an authorisation to each charity to which it relates.

• (5) OSCR must, before making such an authorisation, consult such persons (including the person it proposes to authorise) as it thinks fit.

• (6) OSCR may, at any time, withdraw an authorisation under subsection (2) (and subsections (4) and (5) apply in relation to such a withdrawal as they apply in relation to an authorisation).

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) It is not competent for OSCR to exercise any of its functions which are, by virtue of subsection ... (2), delegated to another public body or office-holder (unless it considers it necessary or expedient to do so in relation to its functions under section 30).

• (9) Sections 24 to 26 apply in relation to a public body or office-holder to whom OSCR's functions are delegated by virtue of subsection ... (2) as they apply to OSCR, but subject to the following modifications—

• (a) references in those sections to OSCR and to OSCR's functions are to be read as references to the public body or office-holder and to the functions delegated to it, and

• (b) the reference in section 25(1)(d) to section 46 is to be read as a reference to subsection (10).

• (10) Where any of OSCR's functions are delegated to another public body or office-holder by virtue of subsection ... (2), a person to whom section 46 applies—

• (a) must report to the body or office-holder on any matter which the person would, but for that delegation, be required by section 46(2) to report on to OSCR,

• (b) may report to the body or office-holder on any matter which the person would, but for that delegation, be authorised by subsection 46(3) to report on to OSCR.

• (11) A duty or power which arises under subsection (10) is not affected if the person in relation to whom it arises subsequently stops acting in the capacity mentioned in section 46(1).

• (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 5 — Reorganisation of charities

Reorganisation of charities: applications by charity

39

• (1) OSCR may, on the application of a charity, approve a reorganisation scheme proposed by the charity if it considers—

• (a) that any of the reorganisation conditions is satisfied in relation to the charity, and

• (b) that the proposed reorganisation scheme will—

• (i) where the condition satisfied is that set out in paragraph (a) or (b) of section 42(2), enable the resources of the charity to be applied to better effect for charitable purposes consistently with the spirit of its constitution, having regard to changes in social and economic conditions since it was constituted, or

• (ii) where the condition satisfied is that set out in paragraph (c) or (d) of that section, enable the charity to be administered more effectively.

• (1A) But OSCR must not approve a reorganisation scheme where—

• (a) the reorganisation condition satisfied is that set out in section 42(2)(d), and

• (b) the proposed provision would enable the charity to make amendments to its constitution which would not be consistent with the spirit of the constitution.

• (2) The Scottish Ministers may by regulations make such provision as they think fit in relation to the procedure for applying for and determining applications under this section.

• (3) Such regulations may in particular make provision about—

• (a) the form and manner in which applications must be made,

• (b) the period within which OSCR must make a decision on an application,

• (c) publication of proposed reorganisation schemes,

and may make different provision in relation to different types of charity.

Reorganisation of charities: applications by OSCR

40

• (1) Where OSCR considers—

• (a) that any of the reorganisation conditions is satisfied in relation to a charity, and

• (b) that a reorganisation scheme proposed by it or by the charity trustees of the charity will—

• (i) where the condition satisfied is that set out in paragraph (a) or (b) of section 42(2), enable the resources of the charity to be applied to better effect for charitable purposes consistently with the spirit of its constitution, having regard to changes in social and economic conditions since it was constituted, or

• (ii) where the condition satisfied is that set out in paragraph (c) or (d) of that section, enable the charity to be administered more effectively,

OSCR may, of its own accord or on the application of the charity trustees of the charity, apply to the Court of Session for approval of the scheme.

• (2) The Court of Session may, on an application under subsection (1), approve the proposed reorganisation scheme if it considers that the matters set out in paragraphs (a) and (b) of that subsection are satisfied in relation to the charity to which the application relates.

• (2A) But the Court of Session must not approve a reorganisation scheme where—

• (a) the reorganisation condition satisfied is that set out in section 42(2)(d), and

• (b) the proposed provision would enable the charity to make amendments to its constitution which would not be consistent with the spirit of the constitution.

• (3) The charity trustees of a charity may enter appearance as a party in proceedings on an application under subsection (1) in relation to the charity.

• (4) OSCR must, not less than 28 days before making an application under subsection (1), notify the charity in question of its intention to do so.

Approved schemes

41

A charity may, despite any provision of its constitution having contrary effect, proceed with any variation, transfer or amalgamation for which an approved reorganisation scheme makes provision.

Reorganisation: supplementary

42

• (1) This section applies for the interpretation of Chapter 5.

• (2) The “reorganisation conditions” are—

• (a) that some or all of the purposes of the charity—

• (i) have been fulfilled as far as possible or adequately provided for by other means,

• (ii) can no longer be given effect to (whether or not in accordance with the directions or spirit of its constitution),

• (iii) have ceased to be charitable purposes, or

• (iv) have ceased in any other way to provide a suitable and effective method of using its property, having regard to the spirit of its constitution,

• (b) that the purposes of the charity provide a use for only part of its property, ...

• (c) that a provision of the charity's constitution (other than a provision setting out the charity's purposes) can no longer be given effect to or is otherwise no longer desirable, and

• (d) that it is desirable to introduce a provision (other than a provision setting out a new purpose) to a charity's constitution.

• (3) A “reorganisation scheme” is a scheme for—

• (a) variation of the constitution of the charity (whether or not in relation to its purposes),

• (b) transfer of the property of the charity (after satisfaction of any liabilities) to another charity (whether or not involving a change to the purposes of the other charity), or

• (c) amalgamation of the charity with another charity.

• (4) Nothing in section 40 affects the power of the Court of Session to approve a cy près scheme in relation to a charity.

• (5) Sections 39 and 40 do not apply to any charity constituted under a Royal charter or warrant or under any enactment.

• (6) But, despite subsection (5), sections 39 and 40 apply—

• (a) to any endowment held by such a charity,

• (b) where the property of a charity constituted under an enactment consists only of an endowment or endowments, to the charity.

• (7) Where an application for a reorganisation scheme is made by virtue of subsection (6)(a)—

• (a) a reference in section 39(1)(a) or 40(1)(a) to a condition being satisfied in relation to a charity is to be read as a reference to a condition being satisfied in relation to an endowment,

• (b) the reference in section 41 to a charity’s constitution is to be read as including a reference to an instrument governing an endowment,

• (c) a reference in subsection (2) or (3)(a) to the purposes of a charity is to be read as a reference to the purposes of an endowment,

• (d) a reference in subsection (2)(c) or (d) or (3)(a) to a charity’s constitution is to be read as a reference to—

• (i) a charity’s constitution as it relates to an endowment,

• (ii) an instrument governing an endowment,

• (e) the references in subsection (3)(c) to a charity are to be read as references to an endowment.

• (8) Where an application for a reorganisation scheme is made by virtue of subsection (6)(b), a reference in section 41 or in subsection (2)(c) or (d) or (3)(a) to a charity’s constitution is to be read as including a reference to an instrument governing an endowment.

• (9) For the purposes of subsections (6) to (8)—

• (a) “endowment” has the same meaning as in Part 6 (reorganisation of endowments) of Education (Scotland) Act 1980,

• (b) for the avoidance of doubt, income derived from an endowment is to be treated as being part of the endowment.

• (10) The Scottish Ministers may by regulations—

• (a) modify this section so as to amend the meaning of “endowment”,

• (b) disapply subsection (6) in relation to any charity or endowment, or type of charity or endowment, specified in the regulations.

Endowments

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In section 122 (interpretation of Part 6) of the Education (Scotland) Act 1980 (c. 44), after subsection (3) insert—

(4) This Part, apart from section 104, does not apply in relation to any endowment the governing body of which is a charity within the meaning of section 106 of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10).

Chapter 6 — Charity accounts

Duty to keep accounts etc.

Accounts

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• (1) A charity must—

• (a) keep proper accounting records,

• (b) prepare for each financial year of the charity a statement of account, including a report on its activities in the financial year,

• (c) have the statement of account independently examined or audited, and

• (ca) have the independent examiner or auditor make a report in respect of the examination or (as the case may be) audit (an “independent report on accounts”),

• (d) after the independent report on accounts has been made, send a copy of the report and statement of account to OSCR,

in accordance with regulations under subsection (4).

• (2) Accounting records kept in pursuance of subsection (1)(a) must be preserved by the charity for 6 years from the end of the financial year to which they relate.

• (2A) Where the charity ceases to be a charity before the end of the period mentioned in subsection (2), the records must be preserved for the remainder of that period by—

• (a) the body which was the charity, or

• (b) where that body ceases to exist, a person notified to OSCR who, immediately before it ceased to exist, was—

• (i) a charity trustee of the charity, or

• (ii) where the body was not a charity at that time, concerned in the management or control of the body.

• (3) Subsections (2) and (2A) are without prejudice to any other enactment or rule of law.

• (4) The Scottish Ministers may by regulations make provision about the matters referred to in subsection (1) including—

• (a) the meaning of “financial year”,

• (b) the information to be contained in the accounting records and statement of account,

• (c) the manner in which that information is to be presented,

• (d) the keeping and preservation of the accounting records,

• (e) the methods and principles according to which, and the time by which, the statement of account is to be prepared,

• (f) the time by which the copy statement of account is to be sent to OSCR,

• (g) examination or audit of the statement of account (including matters relating to the independent report on accounts),

• (h) such other matters in relation to the accounts of a charity as the Scottish Ministers think necessary or expedient.

• (4A) Regulations under subsection (4) must be framed so that a charity is not required to include any information in its statement of account that is excluded from its entry in the Register under section 3(4).

• (5) Regulations under subsection (4) may make different provision in relation to different types of charity, including provision exempting charities of a particular type from some or all of the requirements of this section.

Failure to provide statement of account

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• (1) This section applies where—