Industrial and Provident Societies Act 1965 (repealed)

[F1 7D Application of sections 7A and 7B to charitable societies . E+W+S

(1) Sections 7A and 7B of this Act (capacity of society not limited by its rules and power of committee to bind society) do not apply to the acts of a registered society which is a charity except in favour of a person who—

(a) gives full consideration in money or money’s worth in relation to the act in question; and

(b) does not know that the act is not permitted by the society’s registered rules or, as the case may be, is beyond the powers of the committee,

or who does not know at the time the act is done that the society is a charity.

(2) However, where such a society purports to transfer or grant an interest in property, the fact that the act was not permitted by the society’s registered rules or, as the case may be, that the committee in connection with the act exceeded any limitation on its powers under those rules, does not affect the title of a person who subsequently acquires the property or any interest in it for full consideration without actual notice of any such circumstances affecting the validity of the society’s act.

(3) In any proceedings arising out of subsection (1) of this section the burden of proving—

(a) fthat a person knew that an act was not permitted by the society’s registered rules or was beyond the powers of the committee, or

(b) that a person knew that the society was a charity, lies on the person making that allegation.

(4) Where a registered society is a charity with its registered office situated in England or Wales, the ratification of an act under section 7A(3) of this Act, or the ratification of a transaction to which section 7E of this Act applies, is ineffective without the prior written consent of the [F2 Charity Commission] for England and Wales.

(5) In this section “charity”—

(a) in relation to a society whose registered office is situated in England or Wales, has the same meaning as in the Charities Act 1993;

(b) in relation to a society whose registered office is situated in Scotland, means a body established for charitable purposes only (that expression having the same meaning as in the Income Tax Acts);

(c) in relation to a society whose registered office is situated in one of the Channel Islands, means a society established for charitable purposes only (“charitable purposes” having the meaning given by the law of the Island in question). ]

Textual Amendments

F1 Ss. 7A-7F and cross-heading inserted (1.4.2004) by Co-operatives and Community Benefit Societies Act 2003 (c. 15), ss. 3, 7(1); S.I. 2003/2678, art. 2(1)

F2 Words in s. 7D(4) substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 47; S.I. 2007/309, art. 2, Sch.