Charities (Protection and Social Investment) BillPage 10

(a) A is not responsible for it to another officer or employee (other
than a charity trustee or trustee for the charity), or

(b) it involves control over money and the only officer or employee
(other than a charity trustee or trustee for the charity) to whom
5A is responsible for it is a person with senior management
functions other than ones involving control over money.

(5) An order under this section may provide for subsection (3) not to
apply—

(a) generally, or

(b) 10in relation to a particular office or employment or to any office
or employment of a particular description.

(6) The Commission may make an order disqualifying a person under this
section only if it is satisfied that—

(a) one or more of the conditions listed in subsection (7) are met in
15relation to the person,

(b) the person is unfit to be a charity trustee or trustee for a charity
(either generally or in relation to the charities or classes of
charity specified or described in the order), and

(c) making the order is desirable in the public interest in order to
20protect public trust and confidence in charities generally or in
the charities or classes of charity specified or described in the
order.

(7) These are the conditions—

A	that the person has been cautioned for a disqualifying offence 25against a charity or involving the administration of a charity.
B	that— (a) under the law of a country or territory outside the United Kingdom the person has been convicted in respect of an 30offence against a charity or involving the administration of a charity, and (b) the act which constituted the offence would have constituted a disqualifying offence if it had been done in any part of the United Kingdom. 35
C	that the person has been found by Her Majesty’s Revenue and Customs not to be a fit and proper person to be a manager of a body or trust, for the purposes of paragraph 4 of Schedule 6 to the Finance Act 2010 (definition of charity for tax purposes), and 40the finding has not been overturned.
D	that the person was a trustee, charity trustee, officer, agent or employee of a charity at a time when there was misconduct or mismanagement in the administration of the charity, and 45either— (a) the person was responsible for or privy to the misconduct or mismanagement, or (b) the person’s conduct contributed to or facilitated the misconduct or mismanagement. 50

Charities (Protection and Social Investment) BillPage 11

that the person was an officer or employee of a body corporate at
a time when the body was a trustee or charity trustee for a
charity and when there was misconduct or mismanagement by
5it in the administration of the charity, and either—

(a)

the person was responsible for or privy to the
misconduct or mismanagement, or

(b)

the person’s conduct contributed to or facilitated the
misconduct or mismanagement.

that any other past or continuing conduct by the person,
whether or not in relation to a charity, is damaging or likely to
be damaging to public trust and confidence in charities
generally or in the charities or classes of charity specified or
15described in the order.

(8) The Minister may amend this section by regulations to add or remove
a condition.

(9) In this section “disqualifying offence” means an offence within Case A
in section 178(1).

(10) 20Conditions A and B apply whether the caution or conviction occurred
before or after the commencement of this section.

(11) Condition B does not apply in relation to a conviction which is spent
under the law of the country or territory concerned.

(12) For the purposes of condition B—

(a) 25an act punishable under the law of a country or territory outside
the United Kingdom constitutes an offence under that law,
however it is described in that law, and

(b) “charity” means an institution that is a charity under the law of
any part of the United Kingdom or that is established under the
30law of another country or territory principally for charitable,
benevolent or philanthropic purposes.

181B Duration of disqualification, and suspension pending
disqualification

(1) An order under section 181A must specify the period for which the
35person is disqualified.

(2) The period—

(a) must be not more than 15 years beginning with the day on
which the order takes effect, and

(b) must be proportionate, having regard in particular to the time
40when a conviction becomes spent, and to circumstances in
which the Commission may or must grant a waiver under
section 181 where a person is disqualified under section 178.

(3) An order takes effect—

(a) at the end of the time specified by Tribunal Procedure Rules for
45starting proceedings for an appeal against the order, if no
proceedings are started within that time, or

(b) (subject to the decision on the appeal) when any proceedings
started within that time are withdrawn or finally determined.

Charities (Protection and Social Investment) BillPage 12

(4) The Commission may by order suspend a person from being a charity
trustee or trustee for a charity if it has given notice under section
181C(1)(a) of its proposal to make an order under section 181A in
respect of the person.

(5) 5The Commission may not make an order under subsection (4) so as to
suspend a person for a period of more than 12 months, but at any time
before the expiry of an order the Commission may extend or further
extend the suspension by a further order under that subsection,
provided that—

(a) 10the order does not extend the suspension for a period of more
than 12 months, and

(b) the total period of suspension is not more than 2 years.

(6) An order under subsection (4) ceases to have effect—

(a) if the Commission notifies the person that it will not proceed
15with its proposal, on the notification being given;

(b) if the Commission makes the order under section 181A, on the
order taking effect;

or, if earlier, at the end of the period specified in accordance with
subsection (5).

(7) 20The Commission must review any order under subsection (4), at such
intervals as it thinks fit.

(8) If on a review it appears to the Commission that it would be
appropriate to discharge an order under subsection (4) in whole or in
part, the Commission must do so (whether subject to any savings or
25other transitional provisions or not).

(9) An order under subsection (4) made in the case of any person (“P”) may
make provision, as respects the period of P’s suspension, for matters
arising out of it, and in particular—

(a) for enabling any person to execute any instrument in P’s name
30or otherwise act for P, and

(b) in the case of a charity trustee, for adjusting any rules governing
the proceedings of the charity trustees to take account of the
reduction in the number capable of acting.

This does not affect the generality of section 337(1) and (2).

(10) 35While an order under subsection (4) is in force suspending a person
from being a charity trustee or trustee for a charity, the person must not
take up any appointment as a charity trustee or trustee for any other
charity without the written approval of the Commission.

181C Disqualification orders: procedure

(1) 40Before making an order in respect of a person under section 181A
without the person’s consent the Commission must—

(a) give the person not less than one month’s notice of its
proposals, and

(b) invite representations to be made to it within a period specified
45in the notice.

Charities (Protection and Social Investment) BillPage 13

(2) Before making an order under section 181A in respect of a person who
the Commission knows or believes to be a charity trustee or trustee for
a charity, the Commission must also—

(a) give notice of its proposals to each of the charity trustees of the
5charity in question;

(b) comply with the publicity requirement, unless the Commission
is satisfied that for any reason compliance with the requirement
is unnecessary.

(3) The publicity requirement is that the Commission must give public
10notice of its proposals, inviting representations to be made to it within
a period specified in the notice.

(4) The time when any such notice is given is to be decided by the
Commission.

(5) Any notice of any proposals which is to be given under this section is
15to contain such particulars of the proposals, or such directions for
obtaining information about them, as the Commission thinks sufficient
and appropriate.

(6) Where the Commission gives notice of any proposals under this
section—

(a) 20it must take into account any representations made to it within
the period specified in the notice, and

(b) it may (without further notice) proceed with the proposals
either without modifications or with such modifications as it
thinks desirable;

25but a notice under subsection (2)(a) need not specify a period for the
purposes of paragraph (a) if the charity came to the Commission’s
knowledge or belief after the expiry of the period specified for the
purposes of subsection (1)(b).

(7) A notice under subsection (1) or (2)(a)—

(a) 30may be given by post, and

(b) if given by post, may be addressed to the recipient’s last known
address in the United Kingdom.

(8) A notice under subsection (2)(b) is to be given in such manner as the
Commission thinks sufficient and appropriate.

(9) 35Where the Commission makes an order under section 181A in respect
of a person it knows or believes to be a charity trustee or trustee for a
charity it must (as well as serving it on that person) send a copy of the
order and a statement of the Commission’s reasons for making it—

(a) to the charity in question (if a body corporate), or

(b) 40(if not) to each of the charity trustees of the charity in question.

(10) Nothing in this section requires the Commission to give notice, or send
a document, to a person who cannot be found or has no known address
in the United Kingdom.

(11) Any documents required to be sent to a person under this section may
45be sent to, or otherwise served on, the person in the same way as an
order made by the Commission under this Act could be served on the
person in accordance with section 339.

Charities (Protection and Social Investment) BillPage 14

181D Disqualification orders: variation and revocation

A person in respect of whom an order under section 181A is in force
may at any time apply to the Commission for an order varying or
discharging that order.””

(3) 5In section 183 (criminal consequences of acting while disqualified)—

(a) in subsection (1), after “section 178” insert “or an order under section
181A”;

(b) in subsection (2)(b), after “G” insert “in section 178”.

(4) In section 184 (civil consequences of acting while disqualified)—

(a) 10in subsection (1), after “section 178” insert “or an order under section
181A”;

(b) in subsection (2)(a), after “section 178” insert “or an order under section
181A.”

(5) Section 348 (regulations subject to affirmative procedure etc) is amended as
15follows.

(6) In subsection (1), before paragraph (c) insert—

“(ba) regulations under section 181A(8) (conditions for
disqualification by order);”.”

(7) In subsection (2) before “or (c)” insert “, (bb)”.

(8) 20In subsection (4) before paragraph (a) insert—

“(zb) section 181A(8), if the regulations add a condition,”.”

(9) In Schedule 6 (appeals and applications to tribunal), after the entry relating to
a decision of the Commission under section 181(2) to waive, or not waive, a
person’s disqualification insert—

““Order made by the Commission under section 181A.	The persons are the person who is the subject of the order.	25 Power to— (a) quash the order in whole or in part and (if appropriate) remit the matter to the Commission; 30(b) substitute for all or part of the order any other order which could have been made by the Commission; (c) add to the order anything which 35could have been contained in an order made by the Commission.
Order made by the Commission under section 181B(4).	The persons are the person who is the subject of the order.	Power to—40 (a) quash the order in whole or in part and (if appropriate) remit the matter to the Commission; (b) substitute for all or part of the order any other order which could have been made by the Commission; (c)45 add to the order anything which could have been contained in an order made by the Commission.

Charities (Protection and Social Investment) BillPage 15

Decision of the Commission— to discharge an order following a review under section 181B(7), or not to discharge an order following such a review.	The persons are— the person who is the subject of the order, the charity trustees of the charity to which the order relates, (if a body corporate) the charity itself, and any other person who is or may be affected by the order.	Power to— (a)5 quash the decision and (if appropriate) remit the matter to the Commission; (b) make the discharge of the order subject to savings or other transitional provisions; (c)10 remove any savings or other transitional provisions to which the discharge of the order was subject; (d)15 discharge the order in whole or in part (whether subject to any savings or other transitional provisions or not).
Decision of the Commission under section 181D not to revoke or vary an order under section 181A.	The persons are the person who is the subject of the order.	Power to— (a) quash the decision and (if appropriate) remit the matter to the Commission; (b)20 substitute for the decision any other decision of a kind which could have been made by the Commission.””

11 Records of disqualification and removal

(1)25 Section 182 of the Charities Act 2011 (records of persons removed from office)
is amended as follows.

(2) In subsection (1)—

(a) for “181” substitute “181A”.

(b) after “a register of” insert, “the following.”

(3) 30The words in subsection (1) from “all persons” to the end become subsection
(1A).

(4) At the beginning of that subsection insert—

“(1A) The register must include”.”

(5) After subsection (1A) insert—

“(1B)35 The register must include all persons who have been disqualified by an
order of the Commission under section 181A.

(1C) The register must include all persons who have been removed from
office by an order of the Commission under section 79A (removal of
disqualified trustee).””

12 Participation in corporate decisions while disqualified

40In the Charities Act 2011, after section 184 insert—

“184A Sections 183 and 184: participation in corporate decisions

(1) 45For 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.

Charities (Protection and Social Investment) BillPage 16

(2) In subsection (1) “officer” includes any of the persons having general
control and management of the administration of the body.””

13 Power to make social investments

(1) In the Charities Act 2011, after section 292 insert—

5““Part 14A Social investments

292A Meaning of “social investment”

(1) This section applies for the purposes of this Part.

(2) A social investment is made when a relevant act of a charity is carried
10out with a view to both—

(a) directly furthering the charity’s purposes; and

(b) achieving a financial return for the charity.

(3) References to an act of a charity are, in the case of an unincorporated
charity, to an act of the charity trustees.

(4) 15A relevant act of a charity is—

(a) an application or use of funds or other property; or

(b) taking on a commitment in relation to a liability of another
person (such as a guarantee) that puts the charity’s funds or
other property at risk of being applied or used.

(5) 20An act mentioned in subsection (4)(a) is to be regarded as achieving a
financial return if its outcome is better for the charity in financial terms
than expending the whole of the funds or other property in question.

(6) A commitment mentioned in subsection (4)(b) is to be regarded as
achieving a financial return if—

(a) 25it is not called upon; or

(b) it is called upon without resulting in the expenditure of the
whole of the funds or other property put at risk.

(7) The fact that a relevant act of a charity is regarded as the making of a
social investment for the purposes of this Part does not of itself make
30the act an investment for any other purpose.

292B General power to make social investments

(1) An incorporated charity has, and the charity trustees of an
unincorporated charity have, power to make social investments.

(2) The power conferred by this section may not be used to make a social
35investment involving—

(a) the application or use of permanent endowment, or

(b) taking on a commitment mentioned in section 292A(4)(b) that
puts permanent endowment at risk of being applied or used,

unless the charity trustees expect that making the social investment will
40not contravene any restriction with respect to expenditure that applies
to the permanent endowment in question.

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(3) The power conferred by this section—

(a) may be restricted or excluded by the trusts of the charity;

(b) is (subject to paragraph (a)) in addition to any other power to
make social investments that the charity or charity trustees may
5have.

(4) This section does not apply in relation to—

(a) charities established by an Act or subordinate legislation; or

(b) charities established by a Royal charter;

but it applies in relation to other charities, whether established before
10or after this Part comes into force.

292C Charity trustees’ duties in relation to social investments

(1) This section applies in relation to social investments that are made after
this Part comes into force, whether or not made by the exercise of the
power conferred by section 292B.

(2) 15The charity trustees of a charity must, before exercising a power to
make a social investment—

(a) consider whether in all the circumstances any advice about the
proposed social investment ought to be obtained;

(b) obtain and consider any advice they conclude ought to be
20obtained; and

(3) The charity trustees of a charity must from time to time review the
charity’s social investments.

(4) 25When carrying out a review the charity trustees must—

(a) consider whether any advice about the social investments (or
any particular social investment) ought to be obtained; and

(b) obtain and consider any advice they conclude ought to be
obtained.

(5) 30The duties under this section may not be restricted or excluded by the
charity’s trusts.

(6) In the case of an unincorporated charity, the duties under this section
apply in relation to relevant social investments in place of any duties
under sections 4 and 5 of the Trustee Act 2000 that would otherwise
35apply.

(7) In subsection (6) “relevant social investments” means social
investments that are investments for the purposes of Part 2 of the
Trustee Act 2000.””

(2) The Trustee Act 2000 is amended as follows.

(3) 40In section 4 (standard investment criteria), after subsection (3) insert—

“(4) This section has effect subject to section 292C(6) of the Charities Act
2011 (which disapplies the duties under this section in cases where they
would otherwise apply in relation to a social investment within the
meaning of Part 14A of that Act).””

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(4) In section 5 (advice), after subsection (4) insert—

“(5) This section has effect subject to section 292C(6) of the Charities Act
2011 (which disapplies the duties under this section in cases where they
would otherwise apply in relation to a social investment within the
5meaning of Part 14A of that Act).””

14 Reviews of the operation of this Act

(1) The Minister for the Cabinet Office must carry out reviews of the operation of
this Act including, on each review, how the Act affects—

(a) public confidence in charities,

(b) 10the level of charitable donations, and

(2) After each review the Minister must publish a report of the review and lay a
copy before Parliament.

(3) The reports must be published not more than 5 years apart, and the first must
15be published within 5 years after this Act is passed.

15 Short title, extent and commencement

(1) This Act may be cited as the Charities (Protection and Social Investment) Act
2015.

(2) This Act extends to England and Wales only.

(3) 20This Act comes into force on whatever day the Minister for the Cabinet Office
appoints by regulations made by statutory instrument.

(4) The regulations—

(a) may appoint different days for different purposes;

(b) may make transitional, transitory or saving provision.

Contents page 1-9 10-18 Last page

181B Duration of disqualification, and suspension pending disqualification