Charities Bill [HL]

House of Commons

Session 2005 - 06
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Charities Bill [HL]

Charities Bill [HL]
Schedule 6 — Group Accounts
113

(e)
in paragraph (f), the reference to the requirements of
section 43(2) or (3) of this Act is to be construed as a
reference to the requirements of paragraph 6(4)(a) or those
applied by paragraph 7(2) above.
      (3)
Without prejudice to the generality of section 44(1)(e), as modified
5
by sub-paragraph (2)(d) above, regulations made under that
provision may make provision corresponding or similar to any
provision made by section 389A of the Companies Act 1985 (c. 6)
in connection with the rights exercisable by an auditor of a
company in relation to a subsidiary undertaking of the company.
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      (4)
In section 44(2) of this Act the reference to section 44(1)(d) or (e)
includes a reference to that provision as it applies in accordance
with this paragraph.
Duty of auditors etc. to report matters to Commission
9     (1)
Section 44A(2) to (5) and (7) of this Act shall apply in relation to a
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person appointed to audit, or report on, any group accounts under
or by virtue of paragraph 6 or 7 above as they apply in relation to
a person such as is mentioned in section 44A(1).
      (2)
In section 44A(2)(a), as it applies in accordance with sub-
paragraph (1) above, the reference to the charity or any connected
20
institution or body is to be construed as a reference to the parent
charity or any of its subsidiary undertakings.
Annual reports
10    (1)
This paragraph applies where group accounts are prepared for a
financial year of a parent charity under paragraph 3(2).
25
      (2)
The annual report prepared by the charity trustees of the parent
charity in respect of that year under section 45 of this Act shall
include—
(a)
such a report by the trustees on the activities of the
charity’s subsidiary undertakings during that year, and
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(b)
such other information relating to any of those
undertakings,

as may be prescribed by regulations made by the Secretary of
State.
      (3)
Without prejudice to the generality of sub-paragraph (2),
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regulations under that sub-paragraph may make provision—
(a)
for any such report as is mentioned in paragraph (a) of that
sub-paragraph to be prepared in accordance with such
principles as are specified or referred to in the regulations;
(b)
enabling the Commission to dispense with any
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requirement prescribed by virtue of sub-paragraph (2)(b)
in the case of a particular subsidiary undertaking or a
particular class of subsidiary undertaking.
      (4)
Section 45(3) to (3B) shall apply in relation to the annual report
referred to in sub-paragraph (2) above as if any reference to the
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Charities Bill [HL]
Schedule 6 — Group Accounts
114

charity’s gross income in the financial year in question were a
reference to the aggregate gross income of the group in that year.
      (5)
When transmitted to the Commission in accordance with sub-
paragraph (4) above, the copy of the annual report shall have
attached to it both a copy of the group accounts prepared for that
5
year under paragraph 3(2) and—
(a)
a copy of the report made by the auditor on those accounts;
or
(b)
where those accounts have been examined under section
43, 43A or 43B of this Act (as applied by paragraph 7
10
above), a copy of the report made by the person carrying
out the examination.
      (6)
The requirements in this paragraph are in addition to those in
section 45 of this Act.
Excepted charities
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11    (1)
This paragraph applies where—
(a)
a charity is required to prepare an annual report in respect
of a financial year by virtue of section 46(5) of this Act,
(b)
the charity is a parent charity at the end of the year, and
(c)
group accounts are prepared for that year under
20
paragraph 3(2) by the charity trustees of the charity.
      (2)
When transmitted to the Commission in accordance with section
46(7) of this Act, the copy of the annual report shall have attached
to it both a copy of the group accounts and—
(a)
a copy of the report made by the auditor on those accounts;
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or
(b)
where those accounts have been examined under section
43, 43A or 43B of this Act (as applied by paragraph 7
above), a copy of the report made by the person carrying
out the examination.
30
      (3)
The requirement in sub-paragraph (2) is in addition to that in
section 46(6) of this Act.
Exempt charities
12
Nothing in the preceding provisions of this Schedule applies to an
exempt charity.
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Public inspection of annual reports etc.
13
In section 47(2) of this Act, the reference to a charity’s most recent
accounts includes, in relation to a charity whose charity trustees
have prepared any group accounts under paragraph 3(2), the
group accounts most recently prepared by them.
40

Charities Bill [HL]
Schedule 7 — Charitable incorporated organisations
Part 1 — New Part 8A of and Schedule 5B to 1993 Act
115

Offences
14    (1)
Section 49(1) of this Act applies in relation to a requirement within
sub-paragraph (2) as it applies in relation to a requirement within
section 49(1)(a).
      (2)
A requirement is within this sub-paragraph where it is imposed
5
by section 45(3) or (3A) of this Act, taken with—
(a)
section 45(3B), (4) and (5), and
(b)
paragraph 10(5) or 11(2) above,

as applicable.
      (3)
In sub-paragraph (2) any reference to section 45(3), (3A) or (3B) of
10
this Act is a reference to that provision as applied by paragraph
10(4) above.
      (4)
In section 49(1)(b) the reference to section 47(2) of this Act includes
a reference to that provision as extended by paragraph 13 above.
Aggregate gross income
15
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The Secretary of State may by regulations make provision for
determining for the purposes of this Schedule 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.”
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Schedule 7
Section 34

Charitable incorporated organisations
Part 1
New Part 8A of and Schedule 5B to 1993 Act
1
After Part 8 of the 1993 Act insert the following new Part—
25
“Part 8A
Charitable incorporated organisations
Nature and constitution
69A
Charitable incorporated organisations
(1)
In this Act, a charitable incorporated organisation is referred to as a
30
“CIO”.
(2)
A CIO shall be a body corporate.
(3)
A CIO shall have a constitution.
(4)
A CIO shall have a principal office, which shall be in England or in
Wales.
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Charities Bill [HL]
Schedule 7 — Charitable incorporated organisations
Part 1 — New Part 8A of and Schedule 5B to 1993 Act
116

(5)
A CIO shall have one or more members.
(6)
The members may be either—
(a)
not liable to contribute to the assets of the CIO if it is wound
up, or
(b)
liable to do so up to a maximum amount each.
5
69B
Constitution
(1)
A CIO’s constitution shall state—
(a)
its name,
(b)
its purposes,
(c)
whether its principal office is in England or in Wales, and
10
(d)
whether or not its members are liable to contribute to its
assets if it is wound up, and (if they are) up to what amount.
(2)
A CIO’s constitution shall make provision—
(a)
about who is eligible for membership, and how a person
becomes a member,
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(b)
about the appointment of one or more persons who are to be
charity trustees of the CIO, and about any conditions of
eligibility for appointment, and
(c)
containing directions about the application of property of the
CIO on its dissolution.
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(3)
A CIO’s constitution shall also provide for such other matters, and
comply with such requirements, as are specified in regulations made
by the Secretary of State.
(4)
A CIO’s constitution—
(a)
shall be in English if its principal office is in England,
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(b)
may be in English or in Welsh if its principal office is in
Wales.
(5)
A CIO’s constitution shall be in the form specified in regulations
made by the Commission, or as near to that form as the
circumstances admit.
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(6)
Subject to anything in a CIO’s constitution: a charity trustee of the
CIO may, but need not, be a member of it; a member of the CIO may,
but need not, be one of its charity trustees; and those who are
members of the CIO and those who are its charity trustees may, but
need not, be identical.
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69C
Name and status
(1)
The name of a CIO shall appear in legible characters—
(a)
in all business letters of the CIO,
(b)
in all its notices and other official publications,
(c)
in all bills of exchange, promissory notes, endorsements,
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cheques and orders for money or goods purporting to be
signed on behalf of the CIO,
(d)
in all conveyances purporting to be executed by the CIO, and
(e)
in all bills rendered by it and in all its invoices, receipts, and
letters of credit.
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Charities Bill [HL]
Schedule 7 — Charitable incorporated organisations
Part 1 — New Part 8A of and Schedule 5B to 1993 Act
117

(2)
In subsection (1)(d), “conveyance” means any instrument creating,
transferring, varying or extinguishing an interest in land.
(3)
Subsection (5) applies if the name of a CIO does not include—
(a)
“charitable incorporated organisation”, or
(b)
“CIO”, with or without full stops after each letter, or
5
(c)
a Welsh equivalent mentioned in subsection (4) (but this
option applies only if the CIO’s constitution is in Welsh),

and it is irrelevant, in any such case, whether or not capital letters are
used.
(4)
The Welsh equivalents referred to in subsection (3)(c) are—
10
(a)
“sefydliad elusennol corfforedig”, or
(b)
“SEC”, with or without full stops after each letter.
(5)
If this subsection applies, the fact that a CIO is a CIO shall be stated
in legible characters in all the documents mentioned in subsection
(1).
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(6)
The statement required by subsection (5) shall be in English, except
that in the case of a document which is otherwise wholly in Welsh,
the statement may be in Welsh.
69D
Offences connected with name and status
(1)
A charity trustee of a CIO or a person on the CIO’s behalf who issues
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or authorises the issue of any document referred to in paragraph (a),
(b), (d) or (e) of section 69C(1) above which fails to comply with the
requirements of section 69C(1), (5) or (6) is liable on summary
conviction to a fine not exceeding level 3 on the standard scale.
(2)
A charity trustee of a CIO or a person on the CIO’s behalf who signs
25
or authorises to be signed on behalf of the CIO any document
referred to in paragraph (c) of section 69C(1) above which fails to
comply with the requirements of section 69C(1), (5) or (6)—
(a)
is liable on summary conviction to a fine not exceeding level
3 on the standard scale, and
30
(b)
is personally liable to the holder of the bill of exchange (etc.)
for the amount of it, unless it is duly paid by the CIO.
(3)
A person who holds any body out as being a CIO when it is not
(however he does this) is guilty of an offence and is liable on
summary conviction to a fine not exceeding level 3 on the standard
35
scale.
(4)
It is a defence for a person charged with an offence under subsection
(3) to prove that he believed on reasonable grounds that the body
was a CIO.
Registration
40
69E
Application for registration
(1)
Any one or more persons (“the applicants”) may apply to the
Commission for a CIO to be constituted and for its registration as a
charity.

Charities Bill [HL]
Schedule 7 — Charitable incorporated organisations
Part 1 — New Part 8A of and Schedule 5B to 1993 Act
118

(2)
The applicants shall supply the Commission with—
(a)
a copy of the proposed constitution of the CIO,
(b)
such other documents or information as may be prescribed
by regulations made by the Secretary of State, and
(c)
such other documents or information as the Commission
5
may require for the purposes of the application.
(3)
The Commission shall refuse such an application if—
(a)
it is not satisfied that the CIO would be a charity at the time
it would be registered, or
(b)
the CIO’s proposed constitution does not comply with one or
10
more of the requirements of section 69B above and any
regulations made under that section.
(4)
The Commission may refuse such an application if—
(a)
the proposed name of the CIO is the same as, or is in the
opinion of the Commission too like, the name of any other
15
charity (whether registered or not), or
(b)
the Commission is of the opinion referred to in any of
paragraphs (b) to (e) of section 6(2) above (power of
Commission to require change in charity’s name) in relation
to the proposed name of the CIO (reading paragraph (b) as
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referring to the proposed purposes of the CIO and to the
activities which it is proposed it should carry on).
69F
Effect of registration
(1)
If the Commission grants an application under section 69E above it
shall register the CIO to which the application relates as a charity in
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the register of charities.
(2)
Upon the registration of the CIO in the register of charities, it
becomes by virtue of the registration a body corporate—
(a)
whose constitution is that proposed in the application,
(b)
whose name is that specified in the constitution, and
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(c)
whose first member is, or first members are, the applicants
referred to in section 69E above.
(3)
All property for the time being vested in the applicants (or, if more
than one, any of them) on trust for the charitable purposes of the CIO
(when incorporated) shall by virtue of this subsection become vested
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in the CIO upon its registration.
(4)
The entry relating to the charity’s registration in the register of
charities shall include—
(a)
the date of the charity’s registration, and
(b)
a note saying that it is constituted as a CIO.
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(5)
A copy of the entry in the register shall be sent to the charity at the
principal office of the CIO.