Short Form Constitution for a Small Unincorporated Charity
This Short Form Constitution for a Small Unincorporated Charity is designed to be used for a small charity (in terms of its assets) which is set up in unincorporated form (rather than as a company).
It is for use by a charity which will not own or lease a building, hold assets (e.g. a vehicle), employ people, enter into contracts to deliver services (or other commercial contracts), or raise finance through borrowing, and whose annual income will not exceed £5,000.
Any assets that the charity owns will need to be held under separate arrangements (e.g. by setting up a trust, or allowing a group of members to hold the legal ownership of the assets). It will only be able to raise funds through members’ subscriptions, grants, donations, or other means not involving borrowing.
A charity whose annual income does not exceed £5,000 is not required to register with the Charity Commission. (Once it exceeds that amount, it will need to register and to adopt a more suitable constitution.)
Even if the charity is not going be registered with the Commission, its purposes (as described in the Constitution) must be charitable and it must have demonstrable public benefit, otherwise it will not be a charity in law. The Charity Commission website includes guidance on public benefit and on what purposes are charitable.
If it is a charity in law, it may refer to itself as a “charity”, but not otherwise. If HMRC has also formally recognised it as charitable and it has a tax number, it may state that it is recognised by HMRC but it must not publicly quote its tax number or suggest that it is “registered” or has “charity status”.If it is recognised by HMRC it may claim gift aid on payments made to it.
This Constitution provides for the charity to be run by a management committee of at least three trustees.
Since the charity will be in unincorporated 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 organisation, but if they act honestly and reasonably and the charity has sufficient assets to meet liabilities, the trustees will not normally become personally liable. However, it is advisable for the charity to take specific legal advice on this point, and also to take out suitable insurance.
This template is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
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