Trust Deed Constitution for a Charitable Trust
This Trust Deed Constitution for a Charitable Trust is designed for use where it is decided that the charity should not be set up in a corporate
Since the charity will be in the form of a trust and not in a corporate form, it will not have an independent legal identity/personality. This means that its trustees will be more at risk of personal liability for debts or other liabilities than trustees of an incorporated
Assuming that the charity’s annual income exceeds £5,000, it will need to register with the Charity Commission but one of the advantages of setting up a charity in the form of a trust (rather than in corporate form) is that its administration and regulation will be simpler and less expensive since it will not be subject to any requirements of company law.
This Trust Deed Constitution for a Charitable Trust takes into account the needs of charities and the requirements of charity law, and it follows very closely the Charity Commission’s Model Trust Deed for Charitable Trusts. (Crown copyright in the Commission’s Model is hereby acknowledged.)
Setting up a charity using a Trust Deed will be appropriate where:
• the charity is set up with a specific sum of money by a group of people who become its trustees
• the trustees hold any property for the benefit of the community for whose benefit the charity is set up
• the charity makes grants
• the
• the charity will not have a membership
• the annual income of the charity may be substantial. (A charity whose income will not exceed £5000 should instead use the Short Form Constitution for a Small Unincorporated Charity in this Sub-folder )
• the charity will not need to raise finance by borrowing or from subscriptions
• freehold or leasehold land or other substantial property may be held (but it will not be in the name of the trust itself but instead in the names of the trustees or some of them).
• the charity will have few or no employees
• the charity will not enter into commercial contracts, deliver services, or engage in activities involving commercial risks.
Where the charity is to be involved in such contracts or activities, consideration should be given, and legal advice taken, as to whether it should be formed as a company instead; that would provide better protection from personal liability for the charity’s debts which may make it easier to recruit trustees.
If a company is to be used instead, the charity could adopt the Charity Articles of Association-Private Company Limited By
The charity’s purposes (as described in the Trust Deed) must be charitable and it must have demonstrable public benefit,
If it is a charity in law, it may refer to itself as a “charity”, but not otherwise. If HMRC has also formally
This Trust Deed provides for the charity to be run by three or more trustees.
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