Charities Bill [HL]

Session 2010 - 12
Internet Publications
Other Bills before Parliament

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.
90

(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
5
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—
10
(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
15
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
20
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;
25
(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,
30
(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
35
(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
40
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.
5
(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
10
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);
15

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.
20
(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
25
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—
35
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
5
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
15
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”
20
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
25
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

15

(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

20

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

25

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—
35
(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).

Charities Bill [HL]
Part 9 — Charity trustees, trustees and auditors etc.
94

(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
15
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
20
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
25
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

30

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.

35
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
40
(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.
95

(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
15
(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);
20
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—
25
(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,
30
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.
35
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—
40
(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
20
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
25
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).
30
(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

35

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.