Making Changes to Charity Constitution
The Charities Act 2022 received Royal Assent on 24 February 2022 but its provisions will not be effective until implemented by means of regulations to be made by the Secretary of State. Once implemented the Act will enable charity trustees to amend their charity’s founding documents more easily. The current rules regulating such changes vary according to whether the charity is in the form of a company, CIO, unincorporated association or trust. The Act amends the rules to create greater consistency in the rules applying to these different legal forms of charity. It will in particular make clearer and simpler the rules to apply to unincorporated charities wishing to make changes to their constitutions.
In relation to changes to a constitution that alter the charitable purposes of the charity, it will need the consent of the Charity Commission. The Act sets out matters that the Commission must consider in deciding whether to give consent, whatever the legal structure of a charity. (Those matters are similar to those under current law where the Commission has to consider whether to allow changes to the purposes of an unincorporated charity.) The Act also sets out the processes to be followed by a charity when changing its purposes - the processes will vary depending on the nature of the charity’s legal structure.
The Act also sets out new rules governing other types of changes to a charity’s constitution, e.g. provisions in its constitution which affect the property of the charity on dissolution or which relate to trustee or member benefits.
A charity considering making any changes to its constitution should consider (and take legal advice about) any proposed change, and also whether, in the particular circumstances of that charity, it would be better for it to make the change before rather than after the relevant provisions of the Act are implemented.
Once the implementation date for the relevant provisions of the Act is known - it is expected to be a date in early 2024 - and if any supporting legislation is subsequently passed which impacts on those provisions, this page will be updated if and as necessary to reflect that impact.