Charities Bill (HL Bill 80)

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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) 5The reference in subsection (2) to a charity’s most recent annual report is a
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) 10If the charity trustees of a charity—

(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,

15they must comply with the request within the period of 2 months beginning
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) 20the statement of accounts prepared in pursuance of section
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
25prepared;

(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) 30they have been audited,

(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
35section 144(2) nor section 145(1) applied to them, and

(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) 40In subsection (1), the reference to a charity’s most recent accounts includes, in
relation to a charity whose charity trustees have prepared any group accounts
under section 138(2), the group accounts most recently prepared by them.

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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
5the charity is guilty of an offence.

(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) 10by section 169(3) (requirement to transmit annual return to
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
15trustees of copy of most recent accounts);

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
20requirement in question would be complied with in time.

(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
25level 4 on the standard scale for so long as the person in question
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)—

(a) 30by 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—

  • 35section 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
    40examined instead of audited);

  • section 145(3) (gross income in connection with requirements as to
    qualifications of independent examiner);

  • Charities BillPage 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 5Aggregate gross income of group

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 10Larger groups: “relevant income threshold” and “relevant assets threshold”

(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)
15is a reference to the sum prescribed as the relevant assets threshold for the
purposes of that paragraph.

(3) “Prescribed” means prescribed by regulations made by the Minister.

Part 9 Charity trustees, trustees and auditors etc.

20Meaning of “charity trustees”

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.

25Disqualification of charity trustees and trustees

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
30P has been convicted of any offence involving dishonesty or deception.

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Case B

P has been adjudged bankrupt or sequestration of P’s estate has been
awarded and (in either case)—

(a)

5P has not been discharged, or

(b)

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

Case C
P has made a composition or arrangement with, or granted a trust deed for,
10creditors and has not been discharged in respect of it.
Case D

P has been removed from the office of charity trustee or trustee for a charity
by an order made—

(a)

15by 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

(b)

by the High Court,

Case E
20P has been removed, under section 34(5)(e) of the Charities and Trustee
Investment (Scotland) Act 2005 (asp 10)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/
303150 (N.I.4))Company
Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/
303150 (N.I.4)), or

(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) 35Case A—

(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) 40Case B applies whether the adjudication of bankruptcy or the sequestration or
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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(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) 5In Case D—

(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
10protection of charities),

(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
15(Miscellaneous Provisions) (Scotland) Act 1990 (powers of Court of Session to
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
20disqualified if leave has been granted under section 11 of the Company
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
25column of the table, leave has been granted as mentioned in the second column
for P to act as director of the company—

P is subject to a disqualification order or
disqualification undertaking under the Company
Directors Disqualification Act 1986.
Leave has been granted for the
purposes of section 1(1)(a) or
1A(1)(a) of the 1986 Act.
P is subject to a disqualification order or
disqualification undertaking under the Company
Directors Disqualification (Northern Ireland)
Order 2002 (S.I. 2002/3150 (N.I.4)).
30Leave has been granted by the
High Court in Northern
Ireland.
P is subject to an order under section 429(2) of the
Insolvency Act 1986.
Leave has been granted by the
court which made the order.

181 35Power 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

(b) 40in relation to a particular charity or a particular class of charities.

(3) If—

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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
5subsection (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
10company if—

(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) 15a provision of the 1986 Act mentioned in subsection (6), and

(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);

  • 20section 12A (Northern Irish disqualification orders);

  • 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
25office as mentioned in Case D—

(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;

30and, where any person is so removed from office by an order of the High Court,
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
35England and Wales.

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) 40Subsection (1) does not apply if—

(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—

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(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 5Civil consequences of acting while disqualified

(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) 10has acted as charity trustee or trustee for a charity while disqualified
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) 15The 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) 20Subsection (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.

Remuneration of charity trustees and trustees etc.

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

(1) 25This section applies to remuneration for 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.

30This 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

35Condition 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
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
40provision by P of the services in question.

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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 services to be provided by P to or on behalf of the charity for
5the 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
10is—

(a)

a person in respect of whom an agreement within Condition A is in
force,

(b)

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

(c)

15a person connected with a person falling within paragraph (a) or (b),

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) Nothing in this section applies to—

(a) 20any 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, or

(b) any remuneration not within paragraph (a) which a person is entitled
to receive out of the funds of a charity by virtue of—

(i) 25any provision contained in the trusts of the charity;

(ii) any order of the court or the Commission;

(iii) any statutory provision contained in or having effect under an
Act other than this section.

(4) Before entering into an agreement within Condition A the charity trustees
30must 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
35so 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) 40This 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

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(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
5subsection (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
10the 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) 15to 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
20mentioned 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
25directs is not to be paid to P.

(8) Sections 187 and 188 (interpretation) apply for the purposes of this section.

187 Meaning of “benefit”, “remuneration”, “services” etc.

In sections 185 and 186—

  • “benefit” means a direct or indirect benefit of any nature;

  • 30“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);

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

188 Meaning of “connected person”

(1) For the purposes of sections 185 and 186, the following persons are connected
with a charity trustee or trustee for a charity—

(a) 40a 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);

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(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
5taken 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
10taken 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).

Indemnity insurance for charity trustees and trustees

189 Indemnity insurance for charity trustees and trustees

(1) 15The 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) 20any 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) 25But 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
30respect 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) 35any 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) 40For 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
45appeal, or