We are well-established charity lawyers in Kent and the South East and our longstanding clients come from large national charities and small regional charities alike, plus a number of academy trusts and independent schools in the region.
Our charity and not for profit group is drawn from across the firm and includes members of our Wills, Estate & Tax Planning, Trusts & Tax Management, Corporate & Commercial, Employment, Real Estate and Dispute Resolution teams.
Each member of the charity law team possesses specialist knowledge and is able to offer our clients legal advice of the highest quality.
Our charity and not for profit sector team is led by Nick Hobden.
The service offering from our charities lawyers includes:
- Formation of a charity and registration with the Charity Commission
- Charity governance issues
- Charity mergers & winding up
- Cooperatives & charities
- Charity legacies
- Charity property
Charity governance audits
Following the recent update to the charity governance code endorsed by the Charity Audit Commission, our team of charity lawyers are now offering a charity governance audit review, aimed at testing, improving and developing better governance for boards of trustees and their members. This is an opportunity for charities to meet with our experienced lawyers to work through a health check tool to assess risks and opportunities for their boards of trustees.
Avoiding legal pitfalls
Our team of charity lawyers partnered with the Association of Chairs for the Challenge Series to produce a briefing paper on Avoiding Legal Pitfalls for charities. The paper is based on research and discussions with charities of all sizes and offers advice to ensure compliance with the law while staying true to the charity’s mission. The Association of Chairs supports charity and non-profit organisation leaders in achieving their goals. A link to the briefing note is available on their website.
GDPR and charities
Our charity lawyers are also able to offer legal advice concerning GDPR and charities. GDPR (General Data Protection Regulation) came into effect in May 2018 and introduced rigorous requirements for how organisations are able to use and store personal data. GDPR, of course, affects your fundraising efforts, but it will also have a widespread effect throughout the charity sector.
“As a Charity CEO working on complex governance issues, where the interpretation of Charity Law can become quite nuanced, the help and advice of Thomson Snell & Passmore is invaluable. Being able to think through the issues with an experienced, critical friend has enabled me to confidently assure and advise my Board and make clear, well thought through decisions. I can highly recommend Thomson Snell & Passmore as they work with integrity and share our values.” Gill Gibb, CEO, Tree of Hope.
Charity governance issues
Those running charities (charity trustees) have considerable responsibilities and potential liabilities. Good governance is vital for the effective operation of the charity, for the maintenance of its reputation and to comply in the eyes of the Charity Commission with the law and good practice.
As charity lawyers, with experience of many different kinds of charities from health and social welfare to disability to environmental to wildlife charities.
Charity mergers & winding-up
Charity mergers include a range of legal and practical issues. There are very many charitable organisations, and both small and large have good reasons for considering combining to maximise their charitable impact.
Other charities may have reached the end of their useful life and want to manage the process of winding-up and dissolving the organisation. Our team of highly experienced charity merger lawyers can assist on all aspects of a merger or winding-up process.
Main issues to consider:
- Type of merger – the process will be determined by the outcome sought; a new charity may be formed to take the assets of two existing charities; one may dissolve and pass its assets to another; one charity may become a subsidiary of another
- Charitable objects – a charity must always act within the terms of its objects. It is important for charities that are combining to have compatible objects; if they differ, then the objects will need to be amended
- Role of the Charity Commission – where there are problems with a charity’s ability to amend its objects, the Charity Commission can implement a cy-pres scheme. The Charity Commission can be involved in making a scheme, where a permanent endowment is held and the receiving charity is a company
- Issues to be considered – structural and practical issues need to be addressed during a charity merger – the constitution of the trustee board, membership, internal organisation and of course name
- Possible future liabilities –a charity receiving the assets and activities of another charity as part of a charity merger can take over liabilities; particular areas of concern may be VAT, the transfer of employees, and a defined benefit pension scheme with ongoing liabilities
- Register of charity mergers – introduced by the Charities Act 2006, this transfers gifts or legacies made to the merged charity to the successor charity.For further information please contact one of the team.
Cooperatives & charities
Many cooperatives, charities, mutual societies and others in the third sector are substantial businesses, but their drivers are not the same as those in the private sector. They must comply with the laws which apply to all businesses as well as those which are particular to them, including the Charities Acts and Industrial and Provident Societies Acts.
We advise on all aspects of the affairs of third sector organisations, including:
- Constitution and structure
- The duties and liabilities of charitable trustees
- Trading as a charity.
Our team has extensive experience of advising:
- Care homes
- Charities for the disabled
- Farming co-operatives
- Schools and colleges
Ensuring that charities receive all that they are entitled to in respect of a legacy, and managing the process, is an important part of our services to charity clients.
Problems with charitable legacies:
- Validity of gifts – we can advise on the validity of a will, or of a charitable legacy, in the event of uncertainty, poor drafting, or mis-description of the intended charitable legatee
- Inheritance Act claims – charities can have interests in estates subject to claims under the Inheritance (Provision for Family and Dependants) Act 1975. These may be substantial and good advice on the merits, and the strength of the charity’s position, is vital
- Other estate claims – issues can arise where there is the possibility of fraud, undue influence or proprietary estoppel, which can impact significantly on the distribution of the estate and the extent to which charitable beneficiaries benefit
- Difficult executors – for charitable beneficiaries to receive all they are entitled to, in a timely fashion, good estate administration and proper activity by the executors is essential. Where this is not happening, we can advise to help ensure due administration
- Needs of charity beneficiaries – not all those managing an estate understand the position or the requirements of charity beneficiaries. We can advise on how the estate should be administered, to avoid unnecessary tax, and on claims where there have been failings in this area or in the drafting of the will.
Dealings with land by a charity are subject to special rules.
Many charities own freehold or leasehold property. Legal advice from experienced charity property lawyers is essential for any dealings concerning charities leasing property, and there are additional requirements and procedures for property owned by charities. It is vital that charities are aware of these and follow the requirements.
Our specialist charity lawyers can advise on:
- Charity land – this is defined as land held by, or on trust for a charity and also any buildings and structures on it
- Acquiring charity land – there are specific and detailed requirements for charities wishing to buy or acquire land
- Dealings with charity land – all dealings with charity land must be appointed for what is in the best interest of the charity
- Sales or longer leases – for charities leasing property, there are requirements for advice from a qualified surveyor, the process of marketing the property and a written report
- Short-term disposals – a lease for seven years or less would require only a report from someone with the ability and experience to advise the charity competently
- Charity Commission orders – a formal order of the Commission will be needed where s.36 cannot be complied with or the disposal is to a connected person
- Mortgages of charity land – charities must ensure they have the power to mortgage land and cannot then do so without complying with the statutory requirements
- Permanent endowment – land held permanently for use by the charity cannot be freely disposed of and advice is needed on what is possible for trustees
- Disputes relating to land ownership, leases or over the use of charity land.
Formation & registration of a charity
Charity registration has various merits but the process of forming a charity requires expert guidance. An organisation which wishes to carry out charitable activities would normally benefit by establishing itself as a charity and registering at the Charity Commission.
The beneficial effects of charity law and regulation, as well as status in the eyes of the public and potential donors (including tax benefits), will be undeniable after completing a charity registration.
There are various aspects of the process of establishing a charity:
- What is a charity – a charity is defined as having objects within the categories which are exclusively charitable and providing public benefit
- Charitable objects – the organisation will therefore need carefully defined objects which come within the definition of what is charitable, laid out in The Charities Act 2006
- Constitution – charities take different forms: unincorporated associations, companies limited by a guarantee, charitable incorporated organisations and trusts, with different characteristics and requirements; the form most appropriate to the way the charity will operate needs to be chosen
- Operation of the charity – the constitution will spell out the procedures for the operation of the charity, the extent of the trustees’ duties and responsibilities and provide the legal and practical framework for the working of the charity
- Charity registration – the constitution will have to be submitted to the Charity Commission for approval. This may involve discussion and negotiation, for example over the extent of the trustees’ powers and the definition of the charitable objects
- Getting started – registration will confirm charitable status, and its advantages. The trustees will then need advice on aspects of establishing the charity and commencing its work.
We can help advise on the legal, regulatory and practical requirements of establishing a trust, from the initial concept through to registration and the launch of the new charity and its work.