Session 2010 - 12
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Charities Bill [HL]


Charities Bill [HL]
Part 8 — Charity accounts, reports and returns
Chapter 4 — Annual reports and returns and public access to accounts etc.

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(b)   

are paid by that person such reasonable fee (if any) as they may require

in respect of the costs of complying with the request,

   

they must comply with the request within the period of 2 months beginning

with the date on which it is made.

(3)   

The reference in subsection (2) to a charity’s most recent annual report is a

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reference to the annual report prepared in pursuance of section 162(1) or 168(3)

in respect of the last financial year of the charity in respect of which an annual

report has been so prepared.

172     

Supply by charity trustees of copy of most recent accounts

(1)   

If the charity trustees of a charity—

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(a)   

are requested in writing by any person to provide that person with a

copy of the charity’s most recent accounts, and

(b)   

are paid by that person such reasonable fee (if any) as they may require

in respect of the costs of complying with the request,

   

they must comply with the request within the period of 2 months beginning

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with the date on which it is made.

(2)   

The reference in subsection (1) to a charity’s most recent accounts is—

(a)   

in the case of a charity other than one falling within paragraph (b) or (c),

a reference to—

(i)   

the statement of accounts prepared in pursuance of section

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132(1), or

(ii)   

the account and statement prepared in pursuance of section 133,

   

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;

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(b)   

in the case of a charitable company, a reference to the most recent

annual accounts of the company prepared under Part 16 of the

Companies Act 2006 in relation to which any of the following

conditions is satisfied—

(i)   

they have been audited,

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(ii)   

they have been examined by an independent examiner under

section 145(1)(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 144(2) nor section 145(1) applied to them, and

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(c)   

in the case of an exempt charity, a reference to the accounts of the

charity most recently audited in pursuance of any statutory or other

requirement or, if its accounts are not required to be audited, the

accounts most recently prepared in respect of the charity.

(3)   

In subsection (1), the reference to a charity’s most recent accounts includes, in

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relation to a charity whose charity trustees have prepared any group accounts

under section 138(2), the group accounts most recently prepared by them.

 
 

Charities Bill [HL]
Part 8 — Charity accounts, reports and returns
Chapter 5 — Powers to set financial thresholds

91

 

Offences

173     

Offences of failing to supply certain documents

(1)   

If any requirement within subsection (2) is not complied with, each person who

immediately before the specified date for compliance was a charity trustee of

the charity is guilty of an offence.

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(2)   

A requirement is within this subsection if it is imposed—

(a)   

by section 163 or by virtue of section 166(4) (requirements to transmit

annual report to Commission), taken with sections 164, 166(5) and

168(7) (documents to be supplied with annual report), as applicable,

(b)   

by section 169(3) (requirement to transmit annual return to

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Commission),

(c)   

by section 171(2) (supply by charity trustees of copy of most recent

annual report), or

(d)   

by section 172(1) or by virtue of section 172(3) (supply by charity

trustees of copy of most recent accounts);

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and in subsection (1) “the specified date for compliance” means the date for

compliance specified in the section in question.

(3)   

It is a defence, where a person is charged with an offence under subsection (1),

to prove that the person took all reasonable steps for securing that the

requirement in question would be complied with in time.

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(4)   

A person guilty of an offence under subsection (1) is liable on summary

conviction to—

(a)   

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

(b)   

for continued contravention, a daily default fine not exceeding 10% of

level 4 on the standard scale for so long as the person in question

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remains a charity trustee of the charity.

Chapter 5

Powers to set financial thresholds

174     

Powers to alter certain sums specified in this Part

(1)   

The Minister may by order amend any provision listed in subsection (2)—

30

(a)   

by substituting a different sum for the sum for the time being specified

in that provision, or

(b)   

if the provision specifies more than one sum, by substituting a different

sum for any sum specified in that provision.

(2)   

The provisions are—

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section 133 (gross income in connection with option to prepare account

and statement instead of statement of accounts);

section 144(1)(a) or (b) (gross income and value of assets in connection

with requirements as to audit of larger charities);

section 145(1) (gross income in connection with option to have accounts

40

examined instead of audited);

section 145(3) (gross income in connection with requirements as to

qualifications of independent examiner);

 
 

Charities Bill [HL]
Part 9 — Charity trustees, trustees and auditors etc.

92

 

section 163(1) or (2) (gross income in connection with requirements to

transmit annual report to Commission);

section 169(2) (gross income in connection with requirement to prepare

annual return).

175     

Aggregate gross income of group

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The Minister may by regulations make provision for determining for the

purposes of this Part the amount of the aggregate gross income for a financial

year of a group consisting of a parent charity and its subsidiary undertaking or

undertakings.

176     

Larger groups: “relevant income threshold” and “relevant assets threshold”

10

(1)   

The reference to the relevant income threshold in paragraph (a) or (b) of section

151(1) is a reference to the sum prescribed as the relevant income threshold for

the purposes of that paragraph.

(2)   

The reference to the relevant assets threshold in paragraph (b) of section 151(1)

is a reference to the sum prescribed as the relevant assets threshold for the

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purposes of that paragraph.

(3)   

“Prescribed” means prescribed by regulations made by the Minister.

Part 9

Charity trustees, trustees and auditors etc.

Meaning of “charity trustees”

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177     

Meaning of “charity trustees”

In this Act, except in so far as the context otherwise requires, “charity trustees”

means the persons having the general control and management of the

administration of a charity.

Disqualification of charity trustees and trustees

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178     

Persons disqualified from being charity trustees or trustees of a charity

(1)   

A person (“P”) is disqualified from being a charity trustee or trustee for a

charity in the following cases—

 

Case A

 
 

P has been convicted of any offence involving dishonesty or deception.

 

30

 
 

Charities Bill [HL]
Part 9 — Charity trustees, trustees and auditors etc.

93

 
 

Case B

 
 

P has been adjudged bankrupt or sequestration of P’s estate has been

 
 

awarded and (in either case)—

 
 

(a)   

P has not been discharged, or

 
 

(b)   

P is the subject of a bankruptcy restrictions order or an interim

 

5

 

order.

 
 

Case C

 
 

P has made a composition or arrangement with, or granted a trust deed for,

 
 

creditors and has not been discharged in respect of it.

 
 

Case D

 

10

 

P has been removed from the office of charity trustee or trustee for a charity

 
 

by an order made—

 
 

(a)   

by the Commission under section 79(2)(a) or by the Commission or

 
 

the Commissioners under a relevant earlier enactment (as defined

 
 

by section 179(5)), or

 

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(b)   

by the High Court,

 
 

on the ground of any misconduct or mismanagement in the administration

 
 

of the charity for which P was responsible or to which P was privy, or which

 
 

P’s conduct contributed to or facilitated.

 
 

Case E

 

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P has been removed, under section 34(5)(e) of the Charities and Trustee

 
 

Investment (Scotland) Act 2005 (asp 10) (powers of the Court of Session) or

 
 

the relevant earlier legislation (as defined by section 179(6)), from being

 
 

concerned in the management or control of any body.

 
 

Case F

 

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P is subject to—

 
 

(a)   

a disqualification order or disqualification undertaking under the

 
 

Company Directors Disqualification Act 1986 or the Company

 
 

Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/

 
 

3150 (N.I.4)), or

 

30

 

(b)   

an order made under section 429(2) of the Insolvency Act 1986

 
 

(disabilities on revocation of county court administration order).

 
 

(2)   

Subsection (1) is subject to sections 179 to 181.

179     

Disqualification: pre-commencement events etc.

(1)   

Case A—

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(a)   

applies whether the conviction occurred before or after the

commencement of section 178(1), but

(b)   

does not apply in relation to any conviction which is a spent conviction

for the purposes of the Rehabilitation of Offenders Act 1974.

(2)   

Case B applies whether the adjudication of bankruptcy or the sequestration or

40

the making of a bankruptcy restrictions order or an interim order occurred

before or after the commencement of section 178(1).

 
 

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Part 9 — Charity trustees, trustees and auditors etc.

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(3)   

Case C applies whether the composition or arrangement was made, or the trust

deed was granted, before or after the commencement of section 178(1).

(4)   

Cases D to F apply in relation to orders made and removals effected before or

after the commencement of section 178(1).

(5)   

In Case D—

5

(a)   

“the Commissioners” means the Charity Commissioners for England

and Wales, and

(b)   

“relevant earlier enactment” means—

(i)   

section 18(2)(i) of the Charities Act 1993 (power to act for

protection of charities),

10

(ii)   

section 20(1A)(i) of the Charities Act 1960, or

(iii)   

section 20(1)(i) of the 1960 Act (as in force before the

commencement of section 8 of the Charities Act 1992).

(6)   

In Case E, “the relevant earlier legislation” means section 7 of the Law Reform

(Miscellaneous Provisions) (Scotland) Act 1990 (powers of Court of Session to

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deal with management of charities).

180     

Disqualification: exceptions in relation to charitable companies

(1)   

Where (apart from this subsection) a person (“P”) is disqualified under Case B

from being a charity trustee or trustee for a charitable company, P is not so

disqualified if leave has been granted under section 11 of the Company

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Directors Disqualification Act 1986 (undischarged bankrupts) for P to act as

director of the company.

(2)   

Similarly, a person (“P”) is not disqualified under Case F from being a charity

trustee or trustee for a charitable company if, in a case set out in the first

column of the table, leave has been granted as mentioned in the second column

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for P to act as director of the company—

 

P is subject to a disqualification order or

Leave has been granted for the

 
 

disqualification undertaking under the Company

purposes of section 1(1)(a) or

 
 

Directors Disqualification Act 1986.

1A(1)(a) of the 1986 Act.

 
 

P is subject to a disqualification order or

Leave has been granted by the

 

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disqualification undertaking under the Company

High Court in Northern

 
 

Directors Disqualification (Northern Ireland)

Ireland.

 
 

Order 2002 (S.I. 2002/3150 (N.I.4)).

  
 

P is subject to an order under section 429(2) of the

Leave has been granted by the

 
 

Insolvency Act 1986.

court which made the order.

 

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181     

Power to waive disqualification

(1)   

This section applies where a person (“P’) is disqualified under section 178(1).

(2)   

The Commission may, if P makes an application under this subsection, waive

P’s disqualification—

(a)   

generally, or

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(b)   

in relation to a particular charity or a particular class of charities.

(3)   

If—

 
 

Charities Bill [HL]
Part 9 — Charity trustees, trustees and auditors etc.

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(a)   

P is disqualified under Case D or E and makes an application under

subsection (2) 5 years or more after the date on which the

disqualification took effect, and

(b)   

the Commission is not prevented from granting the application by

subsection (5),

5

   

the Commission must grant the application unless satisfied that, because of

any special circumstances, it should be refused.

(4)   

Any waiver under subsection (2) must be notified in writing to P.

(5)   

No waiver may be granted under subsection (2) in relation to any charitable

company if—

10

(a)   

P is for the time being prohibited from acting as director of the

company, by virtue of—

(i)   

a disqualification order or disqualification undertaking under

the Company Directors Disqualification Act 1986, or

(ii)   

a provision of the 1986 Act mentioned in subsection (6), and

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(b)   

leave has not been granted for P to act as director of any other company.

(6)   

The provisions of the 1986 Act are—

section 11(1) (undischarged bankrupts);

section 12(2) (failure to pay under county court administration order);

section 12A (Northern Irish disqualification orders);

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section 12B (Northern Irish disqualification undertakings).

182     

Records of persons removed from office

(1)   

For the purposes of sections 178 to 181 the Commission must keep, in such

manner as it thinks fit, a register of all persons who have been removed from

office as mentioned in Case D—

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(a)   

by an order of the Commission or the Commissioners made before or

after the commencement of section 178(1), or

(b)   

by an order of the High Court made after the commencement of section

45(1) of the Charities Act 1992;

   

and, where any person is so removed from office by an order of the High Court,

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the court must notify the Commission of the person’s removal.

(2)   

The entries in the register kept under subsection (1) must be available for

public inspection in legible form at all reasonable times.

(3)   

In this section “the Commissioners” means the Charity Commissioners for

England and Wales.

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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 while disqualified from being such a trustee by virtue of

section 178.

(2)   

Subsection (1) does not apply if—

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(a)   

the charity concerned is a company, and

(b)   

the disqualified person is disqualified by virtue only of Case B or F.

(3)   

A person guilty of an offence under subsection (1) is liable—

 
 

Charities Bill [HL]
Part 9 — Charity trustees, trustees and auditors etc.

96

 

(a)   

on summary conviction, to imprisonment for a term not exceeding 12

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.

184     

Civil consequences of acting while disqualified

5

(1)   

Any acts done as charity trustee or trustee for a charity by a person disqualified

from being such a trustee by virtue of section 178 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 while disqualified

10

from being such a trustee by virtue of section 178, 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.

(3)   

The Commission may by order direct the person—

15

(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

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expenses in respect of any time when the person concerned was not

disqualified from being a charity trustee or trustee for the charity.

Remuneration of charity trustees and trustees etc.

185     

Remuneration of charity trustees or trustees etc. providing services to charity

(1)   

This section applies to remuneration for services provided by a person (“P”) to

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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).

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(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—

 
 

(a)   

is set out in an agreement in writing between the charity or its charity

 

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trustees (as the case may be) and P under which P 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 P of the services in question.

 
 
 

 
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Revised 28 June 2011