Charities Bill (HC Bill 257)

239 Effect of registration

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

(a) whose constitution is that proposed in the application for
5amalgamation,

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

(c) whose first members are the members of the old CIOs immediately
before the new CIO was registered.

(2) Upon the registration of the new CIO—

(a) 10all the property, rights and liabilities of each of the old CIOs become by
virtue of this subsection the property, rights and liabilities of the new
CIO, and

(b) each of the old CIOs is dissolved.

(3) Any gift which—

(a) 15is expressed as a gift to one of the old CIOs, and

(b) takes effect on or after the date of registration of the new CIO,

takes effect as a gift to the new CIO.

Transfer of CIO’s undertaking to another CIO

240 Resolutions about transfer of CIO’s undertaking to another CIO

(1) 20A CIO may resolve that all its property, rights and liabilities should be
transferred to another CIO specified in the resolution.

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

(a) a copy of the resolution, and

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

(3) 25The resolutions referred to in subsections (1) and (2)(b) must have been
passed—

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

(b) 30unanimously by the CIO’s members, otherwise than at a general
meeting.

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

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

(b) if it was passed otherwise than at a general meeting, the date on which
35provision in the CIO’s constitution or in regulations made under
section 223 treats it as having been passed (but that date may not be
earlier than that on which the last member agreed to it).

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

241 40Notice of transfer of CIO’s undertaking to another CIO

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

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

(b) if it gives such a direction, must take into account any representations
made to it by persons appearing to it to be interested in the transferor
5CIO, where those representations are made to it within the period of 28
days beginning with the date when public notice of the resolution is
given by the transferor CIO.

242 Cases where confirmation of resolution must or may be refused

(1) The Commission must refuse to confirm the resolution of the transferor CIO if
10it considers that there is a serious risk that the transferee CIO would be unable
properly to pursue the purposes of the transferor CIO.

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

(a) 15the same, or

(b) substantially the same,

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

(3) The matters are—

(a) the purposes of the CIO,

(b) 20the application of property of the CIO on its dissolution, and

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

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

243 25Confirmation of resolution

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

(2) 30Subject to subsection (3), “the relevant period” means—

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

(b) otherwise, the period of 6 months beginning with the date when both
35of the copy resolutions referred to in section 240(2) have been received
by the Commission.

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

(4) 40A notice under subsection (3) must set out the Commission’s reasons for the
extension.

244 Effect of confirmation of resolution

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

(a) all the property, rights and liabilities of the transferor CIO become by
5virtue of this subsection the property, rights and liabilities of the
transferee CIO in accordance with the resolution, and

(b) the transferor CIO is dissolved.

(2) Any gift which—

(a) is expressed as a gift to the transferor CIO, and

(b) 10takes effect on or after the date on which the resolution is confirmed (or
treated as confirmed),

takes effect as a gift to the transferee CIO.

CHAPTER 5 Supplementary

245 Regulations about winding up, insolvency and dissolution

(1) 15CIO regulations may make provision about—

(a) the winding up of CIOs,

(b) their insolvency,

(c) their dissolution, and

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

(2) 20The regulations may, in particular, make provision—

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

(b) requiring any person in whose name any stocks, funds or securities are
25standing in trust for a CIO to transfer them into the name of the official
custodian or another person or body;

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

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

(e) 30about circumstances in which charity trustees may be personally liable
for contributions to the assets of a CIO or for its debts;

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

(3) The regulations may—

(a) 35apply any enactment which would not otherwise apply, either without
modification or with modifications specified in the regulations,

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

(4) In subsection (3), “enactment” includes a provision of subordinate legislation
40within the meaning of the Interpretation Act 1978.

246 Power to make further provision about CIOs

(1) CIO regulations may make further provision about applications for
registration of CIOs, the administration of CIOs, the conversion of charitable
companies, registered societies and community interest companies into CIOs,
5the amalgamation of CIOs, and in relation to CIOs generally.

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

(a) the execution of deeds and documents;

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

(c) 10the maintenance of registers of members and of charity trustees;

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

(3) The regulations may—

(a) apply any enactment which would not otherwise apply, either without
15modification or with modifications specified in the regulations,

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

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

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

(b) 20modify the application of any of those sections in ways specified in the
regulations.

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

247 Meaning of “CIO regulations”

25In this Part “CIO regulations” means regulations made by the Minister.

248 Meaning of “benefit”

(1) This section applies for the purposes of sections 226(2)(c), 237(5)(c) and
242(3)(c) (cases where Commission may refuse to consent to amendment of
constitution, to grant an application for amalgamation or to confirm a
30resolution transferring a CIO’s undertaking).

(2) “Benefit” means a direct or indirect benefit of any nature, except that it does not
include any remuneration (within the meaning of section 185) whose receipt
may be authorised under that section.

249 Meaning of “connected person”

(1) 35This section applies for the purposes of sections 226(2)(c), 237(5)(c) and
242(3)(c).

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

(a) a child, parent, grandchild, grandparent, brother or sister of the trustee
40or member;

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

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

(d) an institution which is controlled—

(i) by the trustee or member or by any person falling within
5paragraph (a), (b) or (c), or

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

(e) a body corporate in which—

(i) the trustee or member or any connected person falling within
10any of paragraphs (a) to (c) has a substantial interest, or

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

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

250 15Effect of provisions relating to vesting or transfer of property

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

Part 12 20Incorporation of charity trustees

General

251 Incorporation of charity trustees

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

(a) 25the charity trustees of the charity, in accordance with section 256, apply
to the Commission for such a certificate, and

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

(2) Such a certificate is subject to such conditions or directions as the Commission
30thinks fit to insert in it.

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

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

(b) is not so registered.

(4) 35On the grant of such a certificate—

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

(b) any rights or liabilities of those trustees in connection with any
property vesting in the body under section 252 become rights or
40liabilities of that body.

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

(5) After their incorporation the charity trustees—

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

(b) have the same powers, and are subject to the same restrictions and
limitations, as respects the holding, acquisition and disposal of
5property for or in connection with the purposes of the charity as they
had or were subject to while unincorporated;

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

(6) 10In subsection (5) “relevant legal proceedings” means legal proceedings in
connection with any property vesting in the incorporated body under section
252.

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

252 Estate to vest in incorporated body

(1) 15The certificate of incorporation vests in the incorporated body all real and
personal estate, of whatever nature or tenure, belonging to or held by any
person or persons in trust for the relevant charity.

(2) On the vesting of all real and personal estate under subsection (1), any person
or persons in whose name or names any stocks, funds or securities are standing
20in trust for the relevant charity must transfer them into the name of the
incorporated body.

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

253 Gifts to take effect as gifts to incorporated body

(1) After the incorporation under this Part of the charity trustees of any charity,
25every relevant donation, gift and disposition of property made—

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

(b) otherwise for the purposes of the charity,

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

(2) 30For the purposes of subsection (1), a donation, gift or disposition of property is
a relevant one if (whether of real or personal property and whether made by
deed, will or otherwise)—

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

(b) 35it is lawfully made after the incorporation.

254 Liability of charity trustees not affected by incorporation

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

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

(b) 40answerable 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.

255 Charity trustees bound by conditions in certificate etc.

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

(2) 5Section 336 (enforcement of orders of Commission) applies to any charity
trustee who fails to perform or observe any such condition or direction as it
applies to a person guilty of disobedience to any such order of the Commission
as is mentioned in that section.

Application procedure

256 10Applications for incorporation

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

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

(b) 15accompanied 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),

20to be verified in such manner as it may specify.

257 Requirement to be met before certificate is granted

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

258 25Certificate conclusive as to compliance with incorporation requirements etc.

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

(2) The date of incorporation mentioned in the certificate is to be treated as being
30the date at which incorporation has taken place.

Administration etc. of charity whose charity trustees are incorporated

259 Filling up of vacancies in charity trustees

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

(2) 35Vacancies in the number of the charity trustees of the charity must from time
to time be filled up so far as required by the constitution or settlement of the
charity, or by any conditions or directions in the certificate—

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

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

260 5Execution of documents by incorporated body: general

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

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

(3) 10Whether or not it has a common seal, a document may be executed by an
incorporated body by being—

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

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

(4) 15A document duly executed by an incorporated body which makes it clear on
its face that it is intended by the person or persons making it to be a deed has
effect, upon delivery, as a deed; and it is presumed, unless a contrary intention
is proved, to be delivered upon its being so executed.

(5) In favour of a purchaser a document is to be treated as having been duly
20executed by an incorporated body if it purports to be signed by—

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

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

25and, if the document makes it clear on its face that it is intended by the person
or persons making it to be a deed, it is to be treated as having been delivered
upon its being executed.

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

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

(b) 30includes a lessee, mortgagee or other person who for valuable
consideration acquires an interest in property.

261 Conferral of authority to execute documents

(1) For the purposes of section 260(3)(b) the charity trustees of the relevant charity
in the case of an incorporated body may, subject to the trusts of the charity,
35confer on any two or more of their number—

(a) a general authority, or

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

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

(2) 40An authority under subsection (1)—

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

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

(c) subject to any such restriction, and until it is revoked, has effect, despite
5any change in the charity trustees of the relevant charity, as a
continuing authority given by the charity trustees from time to time of
the charity and exercisable by such charity trustees.

(3) In any authority under subsection (1) to execute a document in the name and
on behalf of an incorporated body there is, unless the contrary intention
10appears, implied authority also to execute it for the body in the name and on
behalf of the official custodian or of any other person, in any case in which the
charity trustees could do so.

Commission’s powers to amend certificate or dissolve body

262 Amendment of certificate of incorporation

(1) 15The Commission may amend a certificate of incorporation—

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

(b) of its own motion.

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

(a) 20inform the charity trustees of the relevant charity of its proposals, and

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

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

(4) 25The Commission—

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

(b) may then (without further notice) proceed with its proposals either
without modification or with such modifications as appear to it to be
30desirable.

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

(a) making an order specifying the amendment, or

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

263 35Dissolution of incorporated body

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

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

(b) 40that the relevant charity has ceased to exist,

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

(d) that the purposes of the relevant charity—

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

(ii) are in practice incapable of being achieved.

(2) The Commission may make an order dissolving an incorporated body from
5such date as is specified in the order, if the Commission is satisfied, on the
application of the charity trustees of the relevant charity, that it would be in the
interests of the charity for the body to be dissolved.

(3) Subject to subsection (4), an order made under this section with respect to an
incorporated body has the effect of vesting in the charity trustees of the
10relevant 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) 15If the Commission so directs in the order—

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

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

(ii) such persons (other than the charity trustees of the relevant
20charity) as may be specified;

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

(i) the charity trustees of that charity, or

(ii) 25any such person or persons as is or are mentioned in paragraph
(a)(i) or (ii).

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

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

(a) 30any rights or liabilities of the body become rights or liabilities of the
charity trustees of the relevant charity, and

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

(6) 35Subsection (5) applies to any order under this section by virtue of which—

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

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

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

(b) any investments held by any person in trust for the relevant charity are
40required to be transferred—

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

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