183 Criminal consequences of acting while disqualified
(1) Subject to subsection (2), it is an offence for any person to act as a charity trustee or trustee for a charity or to hold an office or employment while disqualified from being such a trustee or from holding that office or employment by virtue of section 178 or an order under section 181A.
(2) Subsection (1) does not apply if—
(a) the charity concerned is a company or a CIO, and
(b) the disqualified person is disqualified by virtue only of Case B , F or G in section 178.
(3) A person guilty of an offence under subsection (1) is liable—
(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court 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.
184 Civil consequences of acting while disqualified
(1) Any acts done as charity trustee or trustee for a charity or as officer or employee of a charity by a person disqualified from being such a trustee or from holding that office or employment by virtue of section 178 or an order under section 181A are not invalid merely because of that disqualification.
(2) Subsection (3) applies if the Commission is satisfied that any person—
(a) has acted as charity trustee or trustee for a charity or as officer or employee of a charity while disqualified from being such a trustee or from holding that office or employment by virtue of section 178 or an order under section 181A, and
(b) while so acting, has 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 or holding the office or employment .
(3) The Commission may by order direct the person—
(a) to repay to the charity the whole or part of any such sums, or
(b) (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.
(4) Subsection (3) 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 from being a charity trustee or trustee for the charity.
184A Sections 183 and 184: participation in corporate decisions
(1) For the purposes of sections 183 and 184, a person who is not a charity trustee or trustee for a charity is treated as acting as one if that person—
(a) is an officer of a body corporate which is a charity trustee or trustee for a charity, and
(b) takes part in that capacity in any decision relating to the administration of the charity.
(2) In subsection (1) “officer” includes any of the persons having general control and management of the administration of the body.
(1) Subsection (2) applies if—
(a) a person acts, or intends to act, as a charity trustee in relation to a charity, but
(b) there is not, or might not be, a valid appointment or election of that person to a qualifying position in relation to that charity.
(2) The Commission may, with the consent of the person concerned, by order provide that for the purposes of anything done (or not done) on or after the date of the order—
(a) any defect in the person’s appointment or election to a qualifying position (including any absence of appointment or election) is to be ignored in relation to the charity, and
(b) so far as is necessary for those purposes, a valid appointment or election to that qualifying position is to be treated as having been made in respect of the person.
(3) For the purposes of this section a position is a “qualifying position” in relation to a charity if, as a result of a person holding that position, the person is a charity trustee of the charity.
(4) The fact that a position is not a position in a charity does not prevent it from being a qualifying position in relation to the charity.
(5) An order under subsection (2) may include—
(a) provision with respect to the vesting in or transfer of property that the Commission could make on the removal or appointment of a charity trustee by it under section 69 (Commission’s concurrent jurisdiction with High Court for certain purposes);
(b) provision that an act of a person who is the subject of the order is valid notwithstanding that there was not at the time the act was carried out a valid appointment or election to a qualifying position in respect of that person.
(6) An order containing provision made by virtue of subsection (5)(a) has the same effect as an order made under section 69.
185 Remuneration of charity trustees or trustees etc. providing goods or services to charity
(1) This section applies to remuneration for goods or services provided by a person (“P”) to or on behalf of a charity where—
(a) P is a charity trustee or trustee for the charity, or
(b) P 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 (3).
(2) If Conditions A to D are met in relation to remuneration within subsection (1), P is entitled to receive the remuneration out of the funds of the charity.
Condition A
Condition A is that the amount or maximum amount of the remuneration—
is set out in an agreement in writing between the charity or its charity trustees (as the case may be) and P under which P is to provide the goods or services, or goods and services, in question to or on behalf of the charity, and
does not exceed what is reasonable in the circumstances for the provision by P of the goods or services, or goods and services, in question.
Condition B
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 goods or services, or goods and services, to be provided by P to or on behalf of the charity for the amount or maximum amount of remuneration set out in the agreement.
Condition C
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 person in respect of whom an agreement within Condition A is in force,
a person who is entitled to receive remuneration out of the funds of the charity otherwise than by virtue of such an agreement, or
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.
Condition D
Condition D is that the trusts of the charity do not contain any express provision that prohibits P from receiving the remuneration.
(3) This section does not apply to any remuneration for services provided by a person in the person’s capacity as a charity trustee or trustee for a charity or under a contract of employment.
(3A) Any entitlement to receive remuneration under subsection (2) is in addition to and does not affect any entitlement to receive the remuneration by virtue of—
(a) any provision contained in the trusts of the charity;
(b) any order of the court or the Commission;
(c) any other statutory provision contained in or having effect under any Act.
(4) Before entering into an agreement within Condition A the charity trustees must have regard to any guidance given by the Commission concerning the making of such agreements.
(5) The duty of care in section 1(1) of the Trustee Act 2000 applies to a charity trustee when making such a decision as is mentioned in Condition B.
(6) For the purposes of Condition C an agreement within Condition A is in force so long as any obligations under the agreement have not been fully discharged by a party to it.
(7) Sections 187 and 188 (interpretation) apply for the purposes of this section.
186 Disqualification of charity trustee or trustee receiving remuneration under s.185
(1) This section applies to any charity trustee or trustee for a charity—
(a) who is or would be entitled to remuneration under an agreement or proposed agreement within Condition A, or
(b) who is connected with a person who is or would be so entitled.
(2) The charity trustee or trustee for a charity is disqualified from acting as such in relation to any decision or other matter connected with the agreement.
(3) But if an act is done by a person who is disqualified from doing it by virtue of subsection (2), the act is not invalid merely because of that disqualification.
(4) If the Commission is satisfied—
(a) that a person (“P”) has done any act which P was disqualified from doing by virtue of subsection (2), and
(b) that P or a person connected with P has received or is to receive from the charity any remuneration under the agreement in question,
it may make an order under subsection (5) or (6) (as appropriate).
(5) An order under this subsection is one requiring P—
(a) to reimburse to the charity the whole or part of the remuneration received as mentioned in subsection (4)(b);
(b) to the extent that the remuneration consists of a benefit in kind, to reimburse to the charity the whole or part of the monetary value (as determined by the Commission) of the benefit in kind.
(6) An order under this subsection is one directing that P or (as the case may be) the connected person is not to be paid the whole or part of the remuneration mentioned in subsection (4)(b).
(7) If the Commission makes an order under subsection (5) or (6), P or (as the case may be) the connected person accordingly ceases to have any entitlement under the agreement to so much of the remuneration (or its monetary value) as the order requires P to reimburse to the charity or (as the case may be) as it directs is not to be paid to P.
(8) Sections 187 and 188 (interpretation) apply for the purposes of this section.
186A Remuneration etc for work already carried out
(1) This section applies to a person who—
(a) has carried out work for or on behalf of a charity, and
(b) is a charity trustee or trustee for the charity (or was one when the work was carried out).
(2) If the condition in subsection (3) is met, the Commission may by order—
(a) require the charity trustees of the charity to pay the person such remuneration for the work as must be specified in the order;
(b) authorise, to such extent as must be specified in the order, any benefit already received in connection with the work to be retained.
(3) The condition in this subsection is that the Commission considers that it would be inequitable for the person not to be paid the remuneration or not to retain the benefit.
(4) In determining whether to make an order under this section, the Commission must in particular have regard to—
(a) whether, if the person had not carried out the work, the charity would have paid someone else to carry it out,
(b) the level of skill with which the work was carried out,
(c) any express provision in the trusts of the charity prohibiting the person from receiving the remuneration or retaining the benefit, and
(d) whether remunerating the person or allowing the person to retain the benefit would encourage breaches of trust or breaches of duty by persons in their capacity as charity trustees or trustees for charities.
In sections 185 to 186A —
“benefit” means a direct or indirect benefit of any nature;
“maximum amount”, in relation to remuneration, means the maximum amount of the remuneration whether specified in or ascertainable under the terms of the agreement in question;
“remuneration” includes any benefit in kind (and “amount” accordingly includes monetary value);
...
(1) For the purposes of sections 185 and 186, the following persons are connected with a charity trustee or trustee for a charity—
(a) a child, parent, grandchild, grandparent, brother or sister of the trustee;
(b) the spouse or civil partner of the trustee or of any person falling within paragraph (a);
(c) a person carrying on business in partnership with the trustee or with any person falling within paragraph (a) or (b);
(d) an institution which is controlled—
(i) by the trustee or by any person falling within paragraph (a), (b) or (c), or
(ii) by two or more persons falling within sub-paragraph (i), when taken together.
(e) a body corporate in which—
(i) the trustee or any connected person falling within any of paragraphs (a) to (c) has a substantial interest, or
(ii) two or more persons falling within sub-paragraph (i), when taken together, have a substantial interest.
(2) Sections 350 to 352 (meaning of child, spouse and civil partner, controlled institution and substantial interest) apply for the purposes of subsection (1).
189 Indemnity insurance for charity trustees and trustees
(1) The charity trustees of a charity may arrange for the purchase, out of the funds of the charity, of insurance designed to indemnify the charity trustees or any trustees for the charity against any personal liability in respect of—
(a) any breach of trust or breach of duty committed by them in their capacity as charity trustees or trustees for the charity, or
(b) any negligence, default, breach of duty or breach of trust committed by them in their capacity as directors or officers of—
(i) the charity (if it is a body corporate), or
(ii) any body corporate carrying on any activities on behalf of the charity.
(2) But the terms of such insurance must be so framed as to exclude the provision of any indemnity for a person (“P”) in respect of—
(a) any liability incurred by P to pay—
(i) a fine imposed in criminal proceedings, or
(ii) a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising),
(b) any liability incurred by P in defending any criminal proceedings in which P is convicted of an offence arising out of any fraud or dishonesty, or wilful or reckless misconduct, by P, or
(c) any liability incurred by P to the charity that arises out of any conduct—
(i) which P knew (or must reasonably be assumed to have known) was not in the interests of the charity, or
(ii) in the case of which P did not care whether it was in the best interests of the charity or not.
(3) For the purposes of subsection (2)(b)—
(a) the reference to any such conviction is a reference to one that has become final,
(b) a conviction becomes final—
(i) if not appealed against, at the end of the period for bringing an appeal, or
(ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of, and
(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 2000 applies to a charity trustee when making such a decision.
(6) This section—
(a) does not authorise the purchase of any insurance whose purchase is expressly prohibited by the trusts of the charity, but
(b) has effect despite any provision prohibiting the charity trustees or trustees for the charity receiving any personal benefit out of the funds of the charity.
191 Commission's power to relieve trustees and auditors etc. from liability
(1) This section applies to a person (“P”) who is or has been—
(a) a charity trustee or trustee for a charity,
(b) a person appointed to audit a charity's accounts (whether appointed under an enactment or otherwise), or
(c) an independent examiner or other person appointed to examine or report on a charity's accounts (whether appointed under an enactment or otherwise).
(2) If the Commission considers—
(a) that P is or may be personally liable for a breach of trust or breach of duty committed in P's capacity as a person within subsection (1)(a), (b) or (c), but
(b) that P has acted honestly and reasonably and ought fairly to be excused for the breach of trust or duty,
the Commission may make an order relieving P wholly or partly from any such liability.
(3) An order under subsection (2) may grant the relief on such terms as the Commission thinks fit.
(4) Subsection (2) does not apply in relation to any personal contractual liability of a charity trustee or trustee for a charity.
(5) For the purposes of this section and section 192—
(a) subsection (1)(b) is to be read as including a reference to the Auditor General for Wales acting as auditor under Part 8, and
(b) subsection (1)(c) is to be read as including a reference to the Auditor General for Wales acting as examiner under Part 8;
and in subsection (1)(b) and (c) any reference to a charity's accounts is to be read as including any group accounts prepared by the charity trustees of a charity.
(6) This section does not affect the operation of—
(a) section 61 of the Trustee Act 1925 (power of court to grant relief to trustees),
(b) section 1157 of the Companies Act 2006 (power of court to grant relief to officers or auditors of companies), or
(c) section 192 (which extends section 1157 to auditors etc. of charities which are not companies).
192 Court's power to grant relief to apply to all auditors etc. of charities which are not companies
(1) Section 1157 of the Companies Act 2006 (power of court to grant relief to officers or auditors of companies) has effect in relation to a person to whom this section applies as it has effect in relation to a person employed as an auditor by a company.
(2) This section applies to—
(a) a person acting in a capacity within section 191(1)(b) or (c) in a case where, apart from this section, section 1157 of the 2006 Act would not apply in relation to that person as a person so acting, and
(b) a charity trustee of a CIO.
(1) Where a charitable company's name does not include the word “charity” or “charitable”, the fact that the company is a charity must be stated in legible characters—
(a) in every location, and in every description of document or communication, in which it is required by regulations under section 82 of the Companies Act 2006 to state its registered name, and
(b) in all conveyances purporting to be executed by the company.
(2) Where a company's name includes the word “elusen” or “elusennol” (the Welsh equivalents of “charity” and “charitable”), subsection (1) does not apply in relation to any document that is wholly in Welsh.
(3) The statement required by subsection (1) must be in English, except that, in the case of a document that is otherwise wholly in Welsh, the statement may be in Welsh if it consists of or includes the word “elusen” or “elusennol”.
(4) In subsection (1)(b) “conveyance” means any instrument creating, transferring, varying or extinguishing an interest in land.
195 Civil consequences of failure to make required disclosure
(1) This section applies to any legal proceedings brought by a charitable company to which section 194 applies to enforce a right arising out of a contract or conveyance in connection with which there was a failure to comply with that section.
(2) The proceedings must be dismissed if it is shown that the defendant to the proceedings—
(a) has a claim against the company arising out of the contract or conveyance that the defendant has been unable to pursue because of the company's failure to comply with section 194, or
(b) has suffered some financial loss in connection with the contract or conveyance because of the company's failure to comply with that section,
unless the court before which the proceedings are brought is satisfied that it is just and equitable to permit the proceedings to continue.
(3) This section does not affect the right of any person to enforce such rights as that person may have against another in any proceedings brought by the other.
196 Criminal consequences of failure to make required disclosure
(1) Where a charitable company fails, without reasonable excuse, to comply with section 194, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(2) For this purpose a shadow director of the company is treated as an officer of the company if the failure is to comply with section 194(1)(a) and that person would be treated as an officer of the company for the purposes of the corresponding requirement of regulations under section 82 of the Companies Act 2006.
(3) A person guilty of such an offence is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding 10% of level 3 on the standard scale.
(4) Expressions used in this section have the same meaning as in section 84 of the Companies Act 2006 (criminal consequences of failure to disclose company's registered name).
197 Alteration of objects by bodies corporate and charitable status
(1) Subsection (2) applies where a charity—
(a) is a company or other body corporate, and
(b) has power to alter the instruments establishing or regulating it as a body corporate.
(2) No exercise of the power which has the effect of the body ceasing to be a charity is valid so as to affect the application of—
(a) any property acquired under any disposition or agreement previously made otherwise than for full consideration in money or money's worth, or any property representing property so acquired,
(b) any property representing income which has accrued before the alteration is made, or
(c) the income from any such property.
198 Alteration of objects by companies and Commission's consent
(1) Any regulated alteration by a charitable company—
(a) requires the prior written consent of the Commission, and
(b) is ineffective if such consent has not been obtained.
(2) The following are regulated alterations—
(a) an amendment of the company's articles of association which alters the charitable purposes of the company,
(b) any alteration of any provision of its articles of association directing the application of property of the company on its dissolution, and
(c) any alteration of any provision of its articles of association where the alteration would provide authorisation for any benefit to be obtained by directors or members of the company or persons connected with them.
(2A) In considering whether to consent to an alteration falling within subsection (2)(a) the Commission must have regard to—
(a) the purposes of the company when it was established, if and so far as they are reasonably ascertainable,
(b) the desirability of securing that the purposes of the company are, so far as reasonably practicable, similar to the purposes being altered, and
(c) the need for the company to have purposes which are suitable and effective in the light of current social and economic circumstances.
(3) Where a company that has made a regulated alteration in accordance with subsection (1) is required—
(a) by section 26 of the Companies Act 2006 to send to the registrar of companies a copy of its articles as amended,
(b) by section 30 of that Act to forward to the registrar a copy of the special resolution effecting the alteration, or
(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.
(4) If more than one of those provisions applies and they are complied with at different times, the company need not send a further copy of the Commission's consent if a copy was sent on an earlier occasion.
(5) Subsections (2) to (4) of section 30 of that Act (offence of failing to comply with section 30) apply in relation to a failure to comply with subsection (3) as in relation to a failure to comply with that section.
For the purposes of section 198(2)(c) “benefit” means a direct or indirect benefit of any nature, except that it does not include—
(a) any remuneration whose receipt may be authorised under section 185, or
(b) the purchase of any insurance which may be authorised under section 189.
(1) For the purposes of section 198(2)(c), the following persons are connected with a director or member of a charitable company—
(a) a child, parent, grandchild, grandparent, brother or sister of the director or member;
(b) the spouse or civil partner of the director or member or of any person falling within paragraph (a);
(c) a person carrying on business in partnership with the director or member or with any person falling within paragraph (a) or (b);
(d) an institution which is controlled—
(i) by the director or member or by any person falling within paragraph (a), (b) or (c), or
(ii) by two or more persons falling within sub-paragraph (i), when taken together.
(e) a body corporate in which—
(i) the director or member or any connected person falling within any of paragraphs (a) to (c) has a substantial interest, or
(ii) two or more persons falling within sub-paragraph (i), when taken together, have a substantial interest.
(2) Sections 350 to 352 (meaning of child, spouse, civil partner, controlled institution and substantial interest) apply for the purposes of subsection (1).
201 Consent of Commission required for approval etc. by members of charitable companies
(1) In the case of a charitable company, each of the following is ineffective without the prior written consent of the Commission—
(a) any approval given by the members of the company under any provision of Chapter 4 of Part 10 of the Companies Act 2006 (transactions with directors requiring approval by members) listed in subsection (2), and
(b) any affirmation given by members of the company under section 196 or 214 of the 2006 Act (affirmation of unapproved property transactions and loans).
(2) The provisions of the 2006 Act are—
(a) section 188 (directors' long-term service contracts);
(b) section 190 (substantial property transactions with directors etc.);
(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.).
202 Consent of Commission required for certain acts of charitable company
(1) A charitable company may not do an act to which this section applies without the prior written consent of the Commission.
(2) This section applies to an act that—
(a) does not require approval under a listed provision of Chapter 4 of Part 10 of the Companies Act 2006 (transactions with directors) by the members of the company, but
(b) would require such approval but for an exemption in the provision in question that disapplies the need for approval on the part of the members of a body corporate which is a wholly-owned subsidiary of another body corporate.
(3) The reference to a listed provision is a reference to a provision listed in section 201(2).
(4) If a company acts in contravention of this section, the exemption referred to in subsection (2)(b) is to be treated as being of no effect in relation to the act.
203 Application for restoration of charitable company to register
(1) The Commission may make an application under section 1029 of the Companies Act 2006 (application to court for restoration to the register of companies) to restore a charitable company to the register of companies.
(2) The power exercisable by the Commission by virtue of this section is exercisable—
(a) by the Commission of its own motion, but
(b) only with the agreement of the Attorney General on each occasion.
(1) A CIO is a body corporate.
(2) A CIO must have—
(a) a constitution;
(b) a principal office, which must be in England or in Wales;
(c) one or more members.
(3) The members may be—
(a) not liable to contribute to the assets of the CIO if it is wound up, or
(b) liable to do so up to a maximum amount each.
(1) A CIO's constitution must state—
(a) its name,
(b) its purposes,
(c) whether its principal office is in England or in Wales, and
(d) whether or not its members are liable to contribute to its assets if it is wound up, and (if they are) up to what amount.
(2) A CIO's constitution must make provision—
(a) about who is eligible for membership, and how a person becomes a member,
(b) about the appointment of one or more persons who are to be charity trustees of the CIO, and about any conditions of eligibility for appointment, and
(c) containing directions about the application of property of the CIO on its dissolution.
(3) A CIO's constitution must also provide for such other matters, and comply with such requirements, as are specified in CIO regulations.
(4) A CIO's constitution—
(a) must be in English if its principal office is in England;
(b) may be in English or in Welsh if its principal office is in Wales.
(5) A CIO's constitution must be in the form specified in regulations made by the Commission, or as near to that form as the circumstances admit.
(6) Subject to anything in a CIO's constitution—
(a) a charity trustee of the CIO may, but need not, be a member of it,
(b) a member of the CIO may, but need not, be one of its charity trustees, and
(c) those who are members of the CIO and those who are its charity trustees may, but need not, be identical.
207 Application for CIO to be constituted and registered
(1) Any one or more persons (“the applicants”) may apply to the Commission for a CIO to be constituted and for its registration as a charity.
(2) The applicants must supply the Commission with—
(a) a copy of the proposed constitution of the CIO,
(b) such other documents or information as may be prescribed by CIO regulations, and
(c) such other documents or information as the Commission may require for the purposes of the application.
208 Cases where application must or may be refused
(1) The Commission must refuse an application under section 207 if—
(a) it is not satisfied that the CIO would be a charity at the time it would be registered, or
(b) the CIO's proposed constitution does not comply with one or more of the requirements of section 206 (constitution of CIOs) and any regulations made under that section.
(2) The Commission may refuse such an application if—
(a) the proposed name of the CIO—
(i) is the same as, or
(ii) is in the opinion of the Commission too like,
the name or a working name of any other charity (whether registered or not), or
(b) the Commission is of the opinion referred to in any of paragraphs (b) to (e) of section 42(2) (power to require charity's name or working name to be changed) in relation to the proposed name of the CIO (reading paragraph (b) as referring to the proposed purposes of the CIO and to the activities which it is proposed it should carry on).
(1) If the Commission grants an application under section 207 it must register the CIO to which the application relates as a charity in the register of charities.
(2) The entry relating to the charity's registration in the register of charities must include—
(a) the date of the charity's registration, and
(b) a note saying that it is constituted as a CIO.
(3) A copy of the entry in the register must be sent to the charity at the principal office of the CIO.
(1) Upon the registration of the CIO in the register of charities, it becomes by virtue of the registration a body corporate—
(a) whose constitution is that proposed in the application,
(b) whose name is that specified in the constitution, and
(c) whose first member is, or first members are, the applicants referred to in section 207.
(2) All property for the time being vested in the applicants (or, if more than one, any of them) on trust for the charitable purposes of the CIO (when incorporated) by virtue of this subsection becomes vested in the CIO upon its registration.
(1) The name of a CIO must appear in legible characters—
(a) in every location, and in every description of document or communication, in which a charitable company would be required by regulations under section 82 of the Companies Act 2006 to state its registered name, and
(b) in all conveyances purporting to be executed by the CIO.
(2) In subsection (1)(b), “conveyance” means any instrument creating, transferring, varying or extinguishing an interest in land.
(1) Subsection (3) applies if the name of a CIO does not include—
(a) “charitable incorporated organisation”,
(b) “CIO”, with or without full stops after each letter, or
(c) a Welsh equivalent mentioned in subsection (2) (but this option applies only if the CIO's constitution is in Welsh),
and it is irrelevant, in any such case, whether or not capital letters are used.
(2) The Welsh equivalents referred to in subsection (1)(c) are—
(a) “sefydliad elusennol corfforedig”, or
(b) “SEC”, with or without full stops after each letter.
(3) If this subsection applies, the fact that a CIO is a CIO must be stated in legible characters in all the locations, documents, communications and conveyances mentioned in section 211(1).
(4) The statement required by subsection (3) must be in English, except that in the case of a document which is otherwise wholly in Welsh, the statement may be in Welsh.
213 Civil consequences of failure to disclose name or status
(1) This section applies to any legal proceedings brought by a CIO to enforce a right arising out of a contract or conveyance in connection with which there was a failure to comply with section 211 or 212.
(2) The proceedings must be dismissed if it is shown that the defendant to the proceedings—
(a) has a claim against the CIO arising out of the contract or conveyance that the defendant has been unable to pursue because of the failure to comply with section 211 or 212, or
(b) has suffered some financial loss in connection with the contract or conveyance because of the failure to comply with section 211 or 212,
unless the court before which the proceedings are brought is satisfied that it is just and equitable to permit the proceedings to continue.
(3) This section does not affect the right of any person to enforce such rights as that person may have against another in any proceedings brought by the other.
(1) In the case of failure, without reasonable excuse, to comply with section 211 or 212 an offence is committed by—
(a) every charity trustee of the CIO who is in default, and
(b) any other person who on the CIO's behalf—
(i) signs or authorises the signing of the offending document, communication or conveyance, or
(ii) otherwise commits or authorises the offending act or omission.
(2) A person guilty of an offence under subsection (1) is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding 10% of level 3 on the standard scale.
(3) The reference in subsection (1) to a charity trustee being in default, and the reference in subsection (2) to a daily default fine, have the same meaning as in the Companies Acts (see sections 1121 to 1123 and 1125 of the Companies Act 2006).
(1) It is an offence for a person (in whatever way) to hold any body out as being a CIO when it is not.
(2) It is a defence where a person is charged with an offence under subsection (1) to prove that the person believed on reasonable grounds that the body was a CIO.
(3) A person guilty of an offence under subsection (1) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(1) Subject to anything in its constitution, a CIO may do anything which is calculated to further its purposes or is conducive or incidental to doing so.
(2) The CIO's charity trustees are to manage the affairs of the CIO and may for that purpose exercise all the powers of the CIO.
(1) A CIO must use and apply its property in furtherance of its purposes and in accordance with its constitution.
(2) If the CIO is one whose members are liable to contribute to its assets if it is wound up, its constitution binds the CIO and its members for the time being to the same extent as if its provisions were contained in a contract—
(a) to which the CIO and each of its members was a party, and
(b) which contained obligations on the part of the CIO and each member to observe all the provisions of the constitution.
(3) Money payable by a member to the CIO under the constitution is a debt due from that member to the CIO, and is of the nature of an ordinary contract debt.
(1) Subject to subsection (3), the validity of an act done (or purportedly done) by a CIO is not to be called into question on the ground that the CIO lacked constitutional capacity.
(2) Subject to subsection (3), the power of the charity trustees of a CIO to act so as to bind the CIO (or authorise others to do so) is not to be called into question on the ground of any constitutional limitations on their powers.
(3) Subsections (1) and (2) apply only in favour of a person who gives full consideration in money or money's worth in relation to the act in question, and does not know—
(a) in a subsection (1) case, that the act is beyond the CIO's constitutional capacity, or
(b) in a subsection (2) case, that the act is beyond the constitutional powers of its charity trustees,
and (in addition) subsection (2) applies only if the person dealt with the CIO in good faith (which the person is presumed to have done unless the contrary is proved).
(4) A party to an arrangement or transaction with a CIO is not bound to inquire—
(a) whether it is within the CIO's constitutional capacity, or
(b) as to any constitutional limitations on the powers of its charity trustees to bind the CIO or authorise others to do so.
(5) If a CIO purports to transfer or grant an interest in property, the fact—
(a) that the act was beyond its constitutional capacity, or
(b) that its charity trustees in connection with the act exceeded their constitutional powers,
does not affect the title of a person who subsequently acquires the property or any interest in it for full consideration without actual notice of any such circumstances affecting the validity of the CIO's act.
(6) In any proceedings arising out of subsections (1) to (3), the burden of proving that a person knew that an act—
(a) was beyond the CIO's constitutional capacity, or
(b) was beyond the constitutional powers of its charity trustees,
lies on the person making that allegation.
(7) In this section and section 219—
(a) references to a CIO's lack of constitutional capacity are to lack of capacity because of anything in its constitution, and
(b) references to constitutional limitations on the powers of a CIO's charity trustees are to limitations on their powers under its constitution, including limitations deriving from a resolution of the CIO in general meeting, or from an agreement between the CIO's members, and the references to constitutional powers are to be read accordingly.
(1) Nothing in section 218 prevents a person from bringing proceedings to restrain the doing of an act which would be—
(a) beyond the CIO's constitutional capacity, or
(b) beyond the constitutional powers of the CIO's charity trustees.
(2) But no such proceedings may be brought in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the CIO.
(3) Subsection (2) does not prevent the Commission from exercising any of its powers.
(4) Nothing in section 218(2) affects any liability incurred by the CIO's charity trustees (or any one of them) for acting beyond their (or that charity trustee's) constitutional powers.
(5) Nothing in section 218 absolves the CIO's charity trustees from their duty to act within the CIO's constitution and in accordance with any constitutional limitations on their powers.