Charities Act (Northern Ireland) 2008

This is subject to the requirements of subsection (4) where the gross income exceeds £250,000, and to any order under subsection (6).

• (4) If subsection (3) applies to the accounts of a charity for a year and the charity's gross income in that year exceeds £250,000, a person qualifies as an independent examiner for the purposes of paragraph (a) of that subsection if (and only if) that person is an independent person who is—

• (a) a member of one of the bodies listed in subsection (5); or

• (b) a full member of the Association of Charity Independent Examiners.

• (5) The bodies referred to in subsection (4)(a) are—

• (a) the Insitute of Chartered Accountants in England and Wales;

• (b) the Institute of Chartered Accountants of Scotland;

• (c) the Institute of Chartered Accountants in Ireland;

• (d) the Association of Chartered Certified Accountants;

• (e) the Association of Authorised Public Accountants;

• (f) the Association of Accounting Technicians;

• (g) the Association of International Accountants;

• (h) the Chartered Institute of Management Accountants;

• (i) the Institute of Chartered Secretaries and Administrators;

• (j) the Chartered Institute of Public Finance and Accountancy.

• (k) the Institute of Financial Accountants;

• (l) the Certified Public Accountants Association.

• (6) Where it appears to the Commission—

• (a) that subsection (2), or (as the case may be) subsection (3), has not been complied with in relation to a financial year of a charity within 10 months from the end of that year, or

• (b) that, although subsection (2) does not apply to a financial year of a charity, it would nevertheless be desirable for the accounts of the charity for that year to be audited by such a person as is mentioned in that subsection,

the Commission may by order require the accounts of the charity for that year to be audited by such a person as is mentioned in that subsection.

• (7) If the Commission makes an order under subsection (6) with respect to a charity, then unless—

• (a) the order is made by virtue of paragraph (b) of that subsection, and

• (b) the charity trustees themselves appoint an auditor in accordance with the order,

the auditor shall be a person appointed by the Commission.

• (8) The expenses of any audit carried out by an auditor appointed by the Commission under subsection (7), including the auditor's remuneration, shall be recoverable by the Commission—

• (a) from the charity trustees of the charity concerned, who shall be personally liable, jointly and severally, for those expenses; or

• (b) to the extent that it appears to the Commission not to be practical to seek recovery of those expenses in accordance with paragraph (a), from the funds of the charity.

• (9) The Commission may—

• (a) give guidance to charity trustees in connection with the selection of a person for appointment as an independent examiner;

• (b) give such directions as it thinks appropriate with respect to the carrying out of an examination in pursuance of subsection (3)(a);

and any such guidance or directions may either be of general application or apply to a particular charity only.

• (10) The Department may by order—

• (a) amend subsection (1), (3) or (4) by substituting a different sum for any sum for the time being specified there;

• (b) amend subsection (4) or (5) by adding or removing a body to or from the list in that subsection or by varying any entry for the time being included in that list.

• (11) Nothing in this section applies in relation to the accounts for a financial year of a charity which is a company if those accounts are required to be audited in accordance with Part 16 of the Companies Act 2006 (c. 46).

Supplementary provisions relating to audits, etc.

66

• (1) The Department may by regulations make provision—

• (a) specifying one or more bodies for the purposes of section 65(2)(b);

• (b) with respect to the duties of an auditor carrying out an audit under section 65, including provision with respect to the making of a report on—

• (i) the statement of accounts prepared for the financial year in question under section 64(1),

• (ii) the account and statement so prepared under section 64(3), or

• (iii) the accounts so prepared under section 394 of the Companies Act 2006 (duty to prepare individual accounts),

as the case may be;

• (c) with respect to the making of a report by an independent examiner in respect of an examination carried out under section 65;

• (d) conferring on such an auditor or on an independent examiner a right of access with respect to books, documents and other records (however kept) which relate to the charity concerned;

• (e) entitling such an auditor or an independent examiner to require, in the case of a charity, information and explanations from past or present charity trustees or trustees for the charity, or from past or present officers or employees of the charity;

• (f) enabling the Commission, in circumstances specified in the regulations, to dispense with the requirements of section 65(2) or (3) in the case of a particular charity or in the case of any particular financial year of a charity.

• (2) If any person fails to afford an auditor or an independent examiner any facility to which the auditor or independent examiner is entitled by virtue of subsection (1)(d) or (e), the Commission may by order give—

• (a) to that person, or

• (b) to the charity trustees for the time being of the charity concerned,

such directions as the Commission thinks appropriate for securing that the default is made good.

Duty of auditors, etc. to report matters to Commission

67

• (1) This section applies to a person (A) acting as an auditor or independent examiner appointed by or in relation to a charity under section 65.

• (2) If, in the course of acting in the capacity mentioned in subsection (1), A becomes aware of a matter—

• (a) which relates to the activities or affairs of the charity or of any connected institution or body, and

• (b) which A has reasonable cause to believe is likely to be of material significance for the purposes of the exercise by the Commission of its functions under section 22 or 33,

A must immediately make a written report on the matter to the Commission.

• (3) If, in the course of acting in the capacity mentioned in subsection (1), A becomes aware of any matter—

• (a) which does not appear to be one that A is required to report under subsection (2), but

• (b) which A has reasonable cause to believe is likely to be relevant for the purposes of the exercise by the Commission of any of its functions,

A may make a report on the matter to the Commission.

• (4) Where the duty or power under subsection (2) or (3) has arisen in relation to A, the duty or power is not affected by A subsequently ceasing to act in that capacity.

• (5) Where A makes a report as required or authorised by subsection (2) or (3), no duty to which A is subject is to be regarded as contravened merely because of any information or opinion contained in the report.

• (6) In this section “connected institution or body”, in relation to a charity, means—

• (a) an institution which is controlled by, or

• (b) a body corporate in which a substantial interest is held by,

the charity or any one or more of the charity trustees acting in a capacity as such.

• (7) Paragraphs 3 and 4 of Schedule 5 apply for the purposes of subsection (6) as they apply for the purposes of provisions of that Schedule.

Annual reports

68

• (1) The charity trustees of a charity shall prepare in respect of each financial year of the charity an annual report containing—

• (a) such a report by the trustees on the activities of the charity during that year, and

• (b) such other information relating to the charity or to its trustees or officers,

as may be prescribed by regulations made by the Department.

• (2) Without prejudice to the generality of subsection (1), regulations under that subsection may make provision—

• (a) for any such report as is mentioned in paragraph (a) of that subsection to be prepared in accordance with such principles as are specified or referred to in the regulations;

• (b) enabling the Commission to dispense with any requirement prescribed by virtue of subsection (1)(b) in the case of a particular charity or a particular class of charities, or in the case of a particular financial year of a charity or of any class of charities.

• (3) A copy of the annual report required to be prepared under this section in respect of a financial year shall be transmitted to the Commission by the charity trustees—

• (a) within 10 months from the end of that year, or

• (b) within such longer period as the Commission may for any special reason allow in the case of that report.

• (4) Subject to subsection (5), a copy of an annual report transmitted to the Commission under this section shall have attached to it a copy of the statement of accounts prepared for the financial year in question under section 64(1) or (as the case may be) a copy of the account and statement so prepared under section 64(3), together with—

• (a) where the accounts of the charity for that year have been audited under section 65, a copy of the report made by the auditor on that statement of accounts or (as the case may be) on that account and statement;

• (b) where the accounts of the charity for that year have been examined under section 65, a copy of the report made by the independent examiner in respect of the examination carried out under that section.

• (5) Subsection (4) does not apply to a charity which is a company, and a copy of an annual report transmitted by the charity trustees of such a charity under this section shall instead have attached to it a copy of the charity's annual accounts prepared for the financial year in question under Part 15 of the Companies Act 2006 (c. 46), together with—

• (a) where the accounts of the charity for that year have been audited under Part 16 of that Act, a copy of the report made by the auditor on those accounts;

• (b) where the accounts of the charity for that year have been audited under section 65, a copy of the report made by the auditor on those accounts;

• (c) where the accounts of the charity for that year have been examined under that section, a copy of the report made by the person carrying out the examination.

• (6) Any copy of an annual report transmitted to the Commission under this section, together with the documents attached to it, shall be kept by the Commission for such period as it thinks fit.

Public inspection of annual reports, etc.

69

• (1) Subject to subsection (2), any document kept by the Commission in pursuance of section 68(6) shall be open to public inspection at all reasonable times—

• (a) during the period for which it is so kept; or

• (b) if the Commission so determines, during such lesser period as it may specify.

• (2) The Commission may direct that subsection (1) does not apply—

• (a) in relation to any document specified, or of a description specified, in the direction, or

• (b) in such circumstances as are so specified.

• (3) Subject to subsection (4), where any person—

• (a) requests the charity trustees of a charity in writing to be provided with a copy of the charity's most recent accounts or (if subsection (6) applies) of its most recent annual report, and

• (b) pays them such reasonable fee (if any) as they may require in respect of the costs of complying with the request,

those trustees shall comply with the request within the period of 2 months beginning with the date on which it is made.

• (4) The Commission may direct that subsection (3) does not apply—

• (a) in relation to charity trustees specified, or of a description specified, in the direction, or

• (b) in such circumstances as are so specified.

• (5) In subsection (3) the reference to a charity's most recent accounts is—

• (a) in the case of a charity other than one falling within paragraph (b), a reference to the statement of accounts or account and statement prepared in pursuance of section 64(1) or (3) in respect of the last financial year of the charity in respect of which a statement of accounts or account and statement has or have been so prepared;

• (b) in the case of a charity which is a company, a reference to the most recent annual accounts of the company prepared under Part 15 of the Companies Act 2006 (c. 46) in relation to which any of the following conditions is satisfied—

• (i) they have been audited;

• (ii) they have been examined by an independent examiner under section 65(3)(a); or

• (iii) they relate to a year in respect of which the company is exempt from audit under Part 16 of the Companies Act 2006 and neither section 65(2) nor section 65(3) applied to them.

• (6) This subsection applies if an annual report has been prepared in respect of any financial year of a charity in pursuance of section 68(1).

• (7) In subsection (3) the reference to a charity's most recent annual report is a reference to the annual report prepared in pursuance of section 68(1) in respect of the last financial year of the charity in respect of which an annual report has been so prepared.

Annual returns by charities

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• (1) Every charity shall prepare in respect of each of its financial years an annual return in such form, and containing such information, as may be prescribed by regulations made by the Commission.

• (2) Any such return shall be transmitted to the Commission by the date by which the charity trustees are, by virtue of section 68(3), required to transmit to the Commission the annual report required to be prepared in respect of the financial year in question.

• (3) The Commission may dispense with the requirements of subsection (1) in the case of a particular charity or a particular class of charities, or in the case of a particular financial year of a charity or of any class of charities.

Offences

71

• (1) If any requirement imposed—

• (a) by section 68(3) (taken with section 68(4) and (5), as applicable), or

• (b) by section 69(3) or 70(2),

is not complied with, each person who immediately before the date for compliance specified in the section in question was a charity trustee of the charity is guilty of an offence and liable on summary conviction to the penalty mentioned in subsection (2).

• (2) The penalty is—

• (a) a fine not exceeding level 4 on the standard scale, and

• (b) for continued contravention, a daily default fine not exceeding one-tenth of level 4 on the standard scale for so long as the person in question remains a charity trustee of the charity.

• (3) It is a defence for a person charged with an offence under subsection (1) to prove that that person took all reasonable steps for securing that the requirement in question would be complied with in time.

Group accounts

72

The provisions of Schedule 6 shall have effect with respect to—

• (a) the preparation and auditing of accounts in respect of groups consisting of parent charities and their subsidiary undertakings (within the meaning of that Schedule), and

• (b) other matters relating to such groups.

PART 9 — CHARITY TRUSTEES

CHAPTER 1 — INCORPORATION OF CHARITY TRUSTEES

Incorporation of trustees of a charity

73

• (1) Where—

• (a) the trustees of a charity, in accordance with section 75, apply to the Commission for a certificate of incorporation of the trustees as a body corporate, and

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

the Commission may grant such a certificate, subject to such conditions or directions as the Commission thinks fit to insert in it.

• (2) On the grant of such a certificate—

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

• (b) (without prejudice to the operation of section 77) any relevant rights or liabilities of those trustees shall become rights or liabilities of that body.

• (3) After their incorporation the trustees—

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

• (b) shall have the same powers, and be 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 trustees may be continued or commenced by or against them in their corporate name.

• (4) A body incorporated under this section need not have a common seal.

• (5) In this section—

• “relevant rights or liabilities” means rights or liabilities in connection with any property vesting in the body in question under section 74; and

• “relevant legal proceedings” means legal proceedings in connection with any such property.

Estate to vest in body corporate

74

The certificate of incorporation shall vest in the body corporate all real and personal estate, of whatever nature or tenure, belonging to or held by any person or persons in trust for the charity, and thereupon any person or persons in whose name or names any stocks, funds or securities are standing in trust for the charity, shall transfer them into the name of the body corporate, except that the foregoing provisions shall not apply to property vested in the official custodian.

Applications for incorporation

75

• (1) Every application to the Commission for a certificate of incorporation under this Chapter shall—

• (a) be in writing and signed by the trustees of the charity concerned; and

• (b) be 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.

Nomination of trustees, and filling up vacancies

76

• (1) Before a certificate of incorporation is granted under this Chapter, trustees of the charity must have been effectually appointed to the satisfaction of the Commission.

• (2) Where a certificate of incorporation is granted vacancies in the number of the trustees of the charity shall 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, by such legal means as would have been available for the appointment of new trustees of the charity if no certificate of incorporation had been granted, or otherwise as required by such conditions or directions.

Liability of trustees and others, notwithstanding incorporation

77

After a certificate of incorporation has been granted under this Chapter all trustees of the charity, notwithstanding their incorporation, shall be chargeable for such property as shall come into their hands, and shall be 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.

Certificate to be evidence of compliance with requirements for incorporation

78

A certificate of incorporation granted under this Chapter shall be conclusive evidence that all the preliminary requirements for incorporation under this Chapter have been complied with, and the date of incorporation mentioned in the certificate shall be deemed to be the date at which incorporation has taken place.

Power of Commission to amend certificate of incorporation

79

• (1) The Commission may amend a certificate of incorporation either on the application of the incorporated body to which it relates or of the Commission's own motion.

• (2) Before making any such amendment of the Commission's own motion, the Commission shall by notice in writing—

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

• (b) invite those trustees to make representations to it within a time specified in the notice, being not less than one month from the date of the notice.

• (3) The Commission shall take into consideration any representations made by those trustees within the time so specified, and may then (without further notice) proceed with its proposals either without modification or with such modifications as appear to it to be desirable.

• (4) The Commission may amend a certificate of incorporation either—

• (a) by making an order specifying the amendment; or

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

Records of applications and certificates

80

• (1) The Commission shall keep a record of all applications for, and certificates of, incorporation under this Chapter and documents sent to the Commission under this Chapter shall be kept by the Commission for such period as it thinks fit.

• (2) Subject to subsection (3), documents kept under this section shall be open to public inspection at all reasonable times; and 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.

• (3) If the Commission so determines, subsection (2) shall not apply to any particular document, or to any document of a description, specified in the determination.

Enforcement of orders and directions

81

All conditions and directions inserted in any certificate of incorporation shall be binding upon and performed or observed by the trustees as trusts of the charity, and section 174 shall apply to any 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.

Gifts to charity before incorporation to have same effect afterwards

82

After the incorporation of the trustees of any charity under this Chapter every donation, gift and disposition of property, real or personal, lawfully made before the incorporation but not having actually taken effect, or thereafter lawfully made, by deed, will or otherwise to or in favour of the charity, or the trustees of the charity, or otherwise for the purposes of the charity, shall take effect as if made to or in favour of the incorporated body or otherwise for the like purposes.

Execution of documents by incorporated body

83

• (1) This section has 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 either—

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

• (b) by being executed in pursuance of an authority given under subsection (4).

• (4) For the purposes of subsection (3)(b) the trustees of the relevant charity in the case of an incorporated body may, subject to the trusts of the charity, confer on any 2 or more of their number—

• (a) a general authority, or

• (b) an authority limited in such manner as the 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.

• (5) An authority under subsection (4)—

• (a) shall suffice for any document if it is given in writing or by resolution of a meeting of the trustees of the relevant charity, notwithstanding 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 trustees, or may be restricted to named persons or in any other way;

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

• (6) In any authority under subsection (4) to execute a document in the name and on behalf of an incorporated body there shall, unless the contrary intention appears, be 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 trustees could do so.

• (7) 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 shall be presumed, unless a contrary intention is proved, to be delivered upon its being so executed.

• (8) In favour of a purchaser a document shall be deemed to have been duly executed by such a body if it purports to be signed—

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

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

and, where the document makes it clear on its face that it is intended by the person or persons making it to be a deed, it shall be deemed to have been delivered upon its being executed.

For this purpose “purchaser” means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.

Power of Commission to dissolve incorporated body

84

• (1) Where the Commission is satisfied—

• (a) that an incorporated body has no assets or does not operate, or

• (b) that the relevant charity in the case of an incorporated body has ceased to exist, or

• (c) that the institution previously constituting, or treated by the Commission as constituting, any such 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 in the case of an incorporated body have been achieved so far as is possible or are in practice incapable of being achieved,

the Commission may of its own motion make an order dissolving the body as from such date as is specified in the order.

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

• (3) Subject to subsection (4), an order made under this section with respect to an incorporated body shall have the effect of vesting in the 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 shall, instead of vesting in the trustees of the relevant charity, vest—

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

• (ii) in such persons (other than the 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 shall be transferred—

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

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

and 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 shall become rights or liabilities of the 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 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 trustees of that charity, or

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

Interpretation of Chapter 1

85

In this Chapter—

• “incorporated body” means a body incorporated under section 73;

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

• “the trustees”, in relation to a charity, means the charity trustees.

CHAPTER 2 — OTHER PROVISIONS RELATING TO CHARITY TRUSTEES

Persons disqualified for being trustees of a charity

86

• (1) Subject to the following provisions of this section, a person (D) shall be disqualified for being a charity trustee or trustee for a charity if—

• (a) D has been convicted of any offence involving dishonesty or deception;

• (b) D has been adjudged bankrupt or sequestration of D's estate has been awarded and (in either case) D has not been dischargedor D is the subject of a bankruptcy restrictions order;

• (c) D has made a composition or arrangement with, or granted a trust deed for, creditors and has not been discharged in respect of it;

• (d) D has been removed from the office of charity trustee or trustee for a charity by an order made—

• (i) by the Commission under section 33(2)(i), or

• (ii) by the Court,

on the grounds of any misconduct or mismanagement in the administration of the charity for which D was responsible or to which D was privy, or which D by conduct contributed to or facilitated;

• (e) D has been removed from the office of charity trustee or trustee of a charity by an order made—

• (i) by the Charity Commission for England and Wales under section 79(2)(a) of the Charities Act 2011 or section 18(2)(i) of the Charities Act 1993 (c. 10), or

• (ii) by the Charity Commissioners for England and Wales under section 18(2)(i) of the 1993 Act (as in force before the commencement of section 6 of the Charities Act 2006 (c. 50)), under section 20(1A)(i) of the Charities Act 1960 (c. 58) or under section 20(1)(i) of that Act (as in force before the commencement of section 8 of the Charities Act 1992 (c. 41), or

• (iii) by Her Majesty's High Court of Justice in England;

on the grounds of any misconduct or mismanagement in the administration of the charity for which D was responsible or to which D was privy, or which D by conduct contributed to or facilitated;

• (f) D has been removed, under section 34 of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10) or under section 7 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (c. 40) (powers of Court of Session to deal with management of charities), from being concerned in the management or control of any body;

• (g) D is subject to a disqualification order or a disqualification undertaking under the Company Directors Disqualification (Northern Ireland) Order 2002 (NI 4) or the Company Directors Disqualification Act 1986 (c. 46).

• (h) D is subject to—

• (i) a moratorium period under a debt relief order; or

• (ii) a debt relief restrictions order.

• (2) In subsection (1)—

• (a) paragraph (a) applies whether the conviction occurred before or after the commencement of that subsection, but does not apply in relation to any conviction which is a spent conviction for the purposes of the Rehabilitation of Offenders (Northern Ireland) Order 1978 (NI 27);

• (b) paragraph (b) applies whether the adjudication of bankruptcy , the sequestration or the making of the bankruptcy restrictions order occurred before or after the commencement of that subsection;

• (c) paragraph (c) applies whether the composition or arrangement was made, or the trust deed was granted, before or after the commencement of that subsection; and

• (d) paragraphs (d) to (h) apply in relation to orders made and removals effected before or after the commencement of that subsection.

• (3) Where (apart from this subsection) D is disqualified under subsection (1)(b)or (h) for being a charity trustee or trustee for any charity which is a company, D shall not be so disqualified if leave has been granted under Article 15 of the Company Directors Disqualification (Northern Ireland) Order 2002 (NI 4) or section 11 of the Company Directors Disqualification Act 1986 (c. 46) (undischarged bankrupts) for D to act as director of the charity; and similarly D shall not be disqualified under subsection (1)(g) for being a charity trustee or trustee for such a charity if—

• (a) in the case where D is subject to a disqualification order or a disqualification undertaking under the Company Directors Disqualification (Northern Ireland) Order 2002, leave for the purpose of Article 3(1)(a) or 4(1)(a) of that Order has been granted for D to act as director of the charity,

• (b) in the case where D is subject to a disqualification order or a disqualification undertaking under the Company Directors Disqualification Act 1986, leave for the purpose of section 1(1)(a) or 1A(1)(a) of that Act has been granted for D to act as a director of the charity.

• (4) The Commission may, on the application by D, waive D's disqualification either generally or in relation to a particular charity or a particular class of charities; but no such waiver may be granted in relation to any charity which is a company if—

• (a) D is for the time being prohibited, by virtue of—

• (i) a disqualification order or disqualification undertaking under the Company Directors Disqualification (Northern Ireland) Order 2002, or

• (ii) Article 15(1), 16(2) or 17 of that Order (undischarged bankrupts; failure to pay under administration order, etc.),

from acting as director of the charity; and

• (b) leave has not been granted for D to act as director of any other company.

• (5) If—

• (a) D is disqualified under subsection (1)(d), (e) or (f) and makes an application under subsection (4) five years or more after the date on which D's disqualification took effect, and

• (b) the Commission is not prevented from granting the application by virtue of paragraphs (a) and (b) of subsection (4),

the Commission must grant the application unless satisfied that, by reason of any special circumstances, it should be refused.

• (6) Any waiver under subsection (4) shall be notified in writing to D.

• (7) For the purposes of this section the Commission shall keep, in such manner as it thinks fit, a register of all persons who have been removed from office as mentioned in subsection (1)(d) either—

• (a) by an order of the Commission, or

• (b) by an order of the Court;

and, where any person is so removed from office by an order of the Court, the Court shall notify the Commission of the removal.

• (8) The entries in the register kept under subsection (7) shall be available for public inspection in legible form at all reasonable times.

Person acting as charity trustee while disqualified

87

• (1) Subject to subsection (2), any person who acts as a charity trustee or trustee for a charity while disqualified for being such a trustee by virtue of section 86 is guilty of an offence and liable—

• (a) on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or both;

• (b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine, or both.

• (2) Subsection (1) shall not apply where—

• (a) the charity concerned is a company; and

• (b) the disqualified person is disqualified by virtue only of paragraph (b) ,(g) or (h) of section 86(1).

• (3) Any acts done as charity trustee or trustee for a charity by a person disqualified for being such a trustee by virtue of section 86 shall not be invalid by reason only of that disqualification.

• (4) Where the Commission is satisfied that any person—

• (a) has acted as charity trustee or trustee for a charity while disqualified for being such a trustee by virtue of section 86, and

• (b) has, while so acting, received from the charity any sums by way of remuneration or expenses, or any benefit in kind, in connection with acting as charity trustee or trustee for the charity,

the Commission may by order direct that person to repay to the charity the whole or part of any such sums, or (as the case may be) to pay to the charity the whole or part of the monetary value (as determined by the Commission) of any such benefit.

• (5) Subsection (4) does not apply to any sums received by way of remuneration or expenses in respect of any time when the person concerned was not disqualified for being a charity trustee or trustee for the charity.

Remuneration of trustees, etc. providing services to charity

88

• (1) This section applies to remuneration for services provided to or on behalf of a charity by a person—

• (a) who is a charity trustee or trustee for the charity, or

• (b) who is connected with a charity trustee or trustee for the charity and the remuneration might result in that trustee obtaining any benefit.

This is subject to subsection (7).

• (2) If conditions A to D are met in relation to remuneration within subsection (1), the person providing the services (“the relevant person”) is entitled to receive the remuneration out of the funds of the charity.

• (3) Condition A is that the amount or maximum amount of the remuneration—

• (a) is set out in an agreement in writing between—

• (i) the charity or its charity trustees (as the case may be), and

• (ii) the relevant person,

under which the relevant person is to provide the services in question to or on behalf of the charity, and

• (b) does not exceed what is reasonable in the circumstances for the provision by that person of the services in question.

• (4) Condition B is that, before entering into that agreement, the charity trustees decided that they were satisfied that it would be in the best interests of the charity for the services to be provided by the relevant person to or on behalf of the charity for the amount or maximum amount of remuneration set out in the agreement.

• (5) Condition C is that if immediately after the agreement is entered into there is, in the case of the charity, more than one person who is a charity trustee and is—

• (a) a person in respect of whom an agreement within subsection (3) is in force, or

• (b) a person who is entitled to receive remuneration out of the funds of the charity otherwise than by virtue of such an agreement, or

• (c) a person connected with a person falling within paragraph (a) or (b),

the total number of them constitute a minority of the persons for the time being holding office as charity trustees of the charity.

• (6) Condition D is that the trusts of the charity do not contain any express provision that prohibits the relevant person from receiving the remuneration.

• (7) Nothing in this section applies to—

• (a) any remuneration for services provided by a person in the capacity of a charity trustee or trustee for a charity or under a contract of employment, or

• (b) any remuneration not within paragraph (a) which a person is entitled to receive out of the funds of a charity by virtue of any provision or order within subsection (8).

• (8) The provisions or orders within this subsection are—

• (a) any provision contained in the trusts of the charity,

• (b) any order of the Court or the Commission,

• (c) any statutory provision other than this section.

• (9) Section 89 applies for the purposes of this section.

Supplementary provisions for purposes of section 88

89

• (1) Before entering into an agreement within section 88(3) the charity trustees must have regard to any guidance given by the Commission concerning the making of such agreements.

• (2) The duty of care in section 1(1) of the Trustee Act (Northern Ireland) 2001 (c. 14) applies to a charity trustee when making such a decision as is mentioned in section 88(4).

• (3) For the purposes of section 88(5) an agreement within section 88(3) is in force so long as any obligations under the agreement have not been fully discharged by a party to it.

• (4) In section 88—

• “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);

• “services”, in the context of remuneration for services, includes goods that are supplied in connection with the provision of services.

• (5) For the purposes of section 88 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.

• (6) Paragraphs 2 to 4 of Schedule 5 apply for the purposes of subsection (5) as they apply for the purposes of provisions of that Schedule.

Disqualification of trustee receiving remuneration under section 88

90

• (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 section 88(3), 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 any act done by a person who is disqualified from doing it by virtue of subsection (2) shall not be invalid by reason only of that disqualification.

• (4) Where the Commission is satisfied—

• (a) that a person (“the disqualified trustee”) who was disqualified from doing any act by virtue of subsection (2) has done that act, and

• (b) that the disqualified trustee or a person connected with the disqualified trustee 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 the disqualified trustee—

• (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 the disqualified trustee or (as the case may be) 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), the disqualified trustee or (as the case may be) 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 to be reimbursed to the charity or (as the case may be) as it directs is not to be paid to the disqualified trustee or connected person.

• (8) Subsections (4) to (6) of section 89 apply for the purposes of this section as they apply for the purposes of section 88.

Power to relieve trustees, auditors, etc. from liability for breach of trust or duty

91

• (1) This section applies to a person 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 a statutory provision or otherwise), or

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

• (2) If the Commission considers—

• (a) that a person to whom this section applies is or may be personally liable for a breach of trust or breach of duty committed in the capacity of a person within paragraph (a), (b) or (c) of subsection (1), but

• (b) that the person 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 that person 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) 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 (Northern Ireland) 1958 (c. 23) (power of court to grant relief to trustees),

• (b) section 1157 of the Companies Act 2006 (c. 46) (power of court to grant relief to officers or auditors of companies), or

• (c) section 92(2) (which extends section 1157 to auditors, etc. of charities which are not companies).

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

92

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

• (2) This section applies to—

• (a) a person acting in a capacity within section 91(1)(b) or (c) in a case where, apart from this section, section 1157 of the Companies Act 2006 would not apply to that person as a person so acting, and

• (b) a charity trustee of a CIO.

Trustees' indemnity insurance

93

• (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 the charity (if it is a body corporate) or of any body corporate carrying on any activities on behalf of the charity.

• (2) The terms of such insurance must, however, be so framed as to exclude the provision of any indemnity for a person in respect of—

• (a) any liability incurred by that person to pay—

• (i) a fine imposed in criminal proceedings, or

• (ii) a sum payable to a regulator 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 that person in defending any criminal proceedings in which that person is convicted of an offence arising out of any fraud or dishonesty, or wilful or reckless misconduct, by that person; or

• (c) any liability incurred by that person to the charity that arises out of any conduct which that person knew (or must reasonably be assumed to have known) was not in the interest of the charity or in the case of which that person 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

• (c) an appeal is disposed of—

• (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 (Northern Ireland) 2001 (c. 14) applies to a charity trustee when making such a decision.

• (6) The Department may by order make such amendments of subsections (2) and (3) as it considers appropriate.

• (7) No order may be made under subsection (6) unless a draft of the order has been laid before and approved by a resolution of the Assembly.

• (8) 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.

Trustees

94

• (1) The Trustee Act (Northern Ireland) 2001 (c. 14) shall be amended as follows.

• (2) In section 17 (power to appoint custodians), after subsection (3) add—

(4) This section does not apply in relation to any assets vested in the official custodian for charities.

.

• (3) In section 18 (investment in bearer securities), after subsection (3) add—

(4) This section does not apply in relation to any assets vested in the official custodian for charities.

.

• (4) For section 41 (common investment schemes) substitute—

(41) Parts 2 to 4 do not apply to— (a) trustees managing a fund under a common investment scheme made, or having effect as if made, under section 43 of the Charities Act (Northern Ireland) 2008, other than such a fund the trusts of which provide that property is not to be transferred to the fund except by or on behalf of a charity the trustees of which are trustees appointed to manage the fund, or (b) trustees managing a fund under a common deposit scheme made, or having effect as if made under section 44 of that Act.

.

PART 10 — CHARITABLE COMPANIES

Winding up

95

• (1) Where a charity may be wound up by the High Court under the Insolvency (Northern Ireland) Order 1989 (NI 19), a petition for it to be wound up under that Order may be presented by the Attorney General, as well as by any person authorised by that Order.

• (2) Where a charity may be so wound up by the High Court, such a petition may also be presented by the Commission if, at any time after it has instituted an inquiry under section 22 with respect to the charity, it is satisfied as mentioned in section 33(1)(a) or (b).

• (3) 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.

• (5) The powers exercisable by the Commission by virtue of this section shall be exercisable by the Commission of its own motion, but shall be exercisable only with the agreement of the Attorney General on each occasion.

• (6) In this section “charitable company” means a company which is a charity.

Alteration of objects clause

96

• (1) Where a charity is a company or other body corporate having power to alter the instruments establishing or regulating it as a body corporate, no exercise of that power which has the effect of the body ceasing to be a charity shall be 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

• (c) the income from any such property as aforesaid.

• (2) Where a charity is a company, any regulated alteration by the company—

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

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

• (3) The following are “regulated alterations”—

• (a) an amendment of the company's articles of association adding, removing or altering a statement of the company's objects,

• (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.

• (4) For the purposes of subsection (3)—

• (a) “benefit” means a direct or indirect benefit of any nature, except that it does not include any remuneration (within the meaning of section 88) whose receipt may be authorised under that section; and

• (b) the same rules apply for determining whether a person is connected with a director or member of the company as apply, in accordance with section 89(5) and (6), for determining whether a person is connected with a charity trustee for the purposes of section 88.

• (5) Where a company that has made a regulated alteration in accordance with subsection (2) is required—

• (a) by section 26 of the Companies Act 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

• (c) by section 31 of that Act to give notice to the registrar of the amendment,

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

• (5A) 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.

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

Invalidity of certain transactions

97

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

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

98

• (1) Where a company is a charity—

• (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 that Act (affirmation of unapproved property transactions and loans),

is ineffective without the prior written consent of the Commission.

• (2) The provisions are—

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

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

• (c) section 197, 198 or 200 (loans and quasi-loans to 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).

Consent of Commission required for certain acts of charitable company

99

• (1) A company that is a charity 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 98(2).

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

Requirement to disclose charitable status

100

• (1) Where a company is a charity and its 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 (c. 46) to state its registered name, and

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

• (2) 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

101

• (1) This section applies to any legal proceedings brought by a company to which section 100 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 shall be dismissed if the defendant to the proceedings (“D”) shows—

• (a) that D has a claim against the claimant arsing out of the contract or conveyance that D has been unable to pursue by reason of the failure to comply with section 100, or

• (b) that D has suffered some financial loss in connection with the contract or conveyance by reason of the 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 that person.

Criminal consequences of failure to make required disclosure

102

• (1) Where a company fails, without reasonable excuse, to comply with section 100, 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 100(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 (c. 46).

• (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 one-tenth 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).

Duty of charity’s auditors, etc. to report matters to Commission

103

• (1) Section 67(2) to (7) shall apply in relation to a person acting as an auditor of a charitable company appointed under Chapter 2 of Part 16 of the Companies Act 2006 (c. 46) (appointment of auditors) as they apply in relation to a person such as is mentioned in section 67(1).

• (2) For this purpose any reference in section 67 to a person acting in the capacity mentioned in section 67(1) is to be read as a reference to that person acting in the capacity mentioned in subsection (1) of this section.

• (3) In this section “charitable company” means a charity which is a company.

Investigation of accounts

104

• (1) In the case of a charity which is a company the Commission may by order require that the condition and relevant accounts of the charity for such period as the Commission thinks fit shall be investigated and audited by an auditor appointed by the Commission, being a person eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006 (c. 46).

• (2) “Relevant accounts” means accounts required to be audited under Part 16 of the Companies Act 2006.

• (3) An auditor acting under subsection (1)—

• (a) shall have a right of access to all books, accounts and documents relating to the charity which are in the possession or control of the charity trustees or to which the charity trustees have access;

• (b) shall be entitled to require from any charity trustee, past or present, and from any past or present officer or employee of the charity such information and explanation as the auditor thinks necessary for the performance of the auditor's duties;

• (c) shall at the conclusion or during the progress of the audit make such reports to the Commission about the audit or about the accounts or affairs of the charity as the auditor thinks the case requires, and shall send a copy of any such report to the charity trustees.

• (4) The expenses of any audit under subsection (1), including the remuneration of the auditor, shall be paid by the Commission.

• (5) If any person fails to afford an auditor any facility to which the auditor is entitled under subsection (3) the Commission may by order give to that person or to the charity trustees for the time being such directions as the Commission thinks appropriate for securing that the default is made good.

PART 11 — CHARITABLE INCORPORATED ORGANISATIONS

Nature and constitution

Nature and constitution

105

• (1) In this Act, a charitable incorporated organisation is referred to as a “CIO”.

• (2) A CIO shall be a body corporate.

• (3) A CIO shall have a constitution.

• (4) A CIO shall have a principal office, which shall be in Northern Ireland.

• (5) A CIO shall have one or more members.

• (6) The members may be either—

• (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

106

• (1) A CIO's constitution shall state—

• (a) its name,

• (b) its purposes, and

• (c) 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 shall 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

• (c) containing directions about the application of property of the CIO on its dissolution.

• (3) A CIO's constitution shall also provide for such other matters, and comply with such requirements, as are specified in regulations made by the Department.

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

• (5) Subject to anything in a CIO's constitution: a charity trustee of the CIO may, but need not, be a member of it; a member of the CIO may, but need not, be one of its charity trustees; and those who are members of the CIO and those who are its charity trustees may, but need not, be identical.

Name and status

107

• (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 (c. 46) 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.

• (3) Subsection (4) applies if the name of a CIO does not include—

• (a) “charitable incorporated organisation”, or

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

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

• (4) If this subsection applies, the fact that a CIO is a CIO shall be stated in legible characters in all the locations, documents, communications and conveyances mentioned in subsection (1).

Civil consequences of failure to disclose name and status

108

• (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 107.

• (2) The proceedings shall be dismissed if the defendant to the proceedings (“D”) shows—

• (a) that D has a claim against the CIO arising out of the contract or conveyance that D has been unable to pursue by reason of the failure to comply with section 107, or

• (b) that D has suffered some financial loss in connection with the contract or conveyance by reason of the 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 that person.

Offences connected with name and status

109

• (1) In the case of failure, without reasonable excuse, to comply with section 107 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 one-tenth 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 (c. 46)).

• (4) A person who holds any body out as being a CIO when it is not (however the person does this) is guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

• (5) It is a defence for a person charged with an offence under subsection (4) to prove that the person believed on reasonable grounds that the body was a CIO.

Registration

Application for registration

110

• (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 shall 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 regulations made by the Department, and

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

• (3) The Commission shall refuse such an application 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 106 and any regulations made under that section.

• (4) The Commission may refuse such an application if—

• (a) the proposed name of the CIO is the same as, or is in the opinion of the Commission too like, the 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 20(2) (power of Commission to require change in charity's name) 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).

Effect of registration

111

• (1) If the Commission grants an application under section 110 it shall register the CIO to which the application relates as a charity in the register of charities.

• (2) 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

• (c) whose first member is, or first members are, the applicants referred to in section 110.

• (3) 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) shall by virtue of this subsection becomes vested in the CIO upon its registration.

• (4) The entry relating to the charity's registration in the register of charities shall include—

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

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

• (5) A copy of the entry in the register shall be sent to the charity at the principal office of the CIO.

Conversion, amalgamation and transfer

Conversion of charitable company or registered industrial and provident society

112

• (1) The following 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—

• (a) a charitable company,

• (b) a charity which is a registered society within the meaning of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 (“the 1969 Act”) (c. 24).

• (2) But such an application may not be made by a company or registered society having a share capital if any of the shares are not fully paid up.

• (3) Such an application is referred to in this section and sections 113 and 114 as an “application for conversion”.

• (4) The Commission shall notify the following of any application for conversion—

• (a) the appropriate registrar, and

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

• (5) The company or registered society shall supply the Commission with—