Charities Act 1993 (repealed)

[F1 Charity trustees ] E+W

Textual Amendments

F1 S. 72 cross-heading substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 155; S.I. 2007/309, art. 2, Sch.

72 Persons disqualified for being trustees of a charity. E+W

(1) Subject to the following provisions of this section, a person shall be disqualified for being a charity trustee or trustee for a charity if—

(a) he has been convicted of any offence involving dishonesty or deception;

(b) he has been adjudged bankrupt or sequestration of his estate has been awarded and (in either case) he has not been discharged [F2 or he is the subject of a bankruptcy restrictions order or an interim order];

(c) he has made a composition or arrangement with, or granted a trust deed for, his creditors and has not been discharged in respect of it;

(d) he has been removed from the office of charity trustee or trustee for a charity by an order made—

(i) by the [F3 Commission or] Commissioners under section 18(2)(i) above, or

(ii) by the Commissioners under section 20(1A)(i) of the M1 Charities Act 1960 (power to act for protection of charities) or under section 20(1)(i) of that Act (as in force before the commencement of section 8 of the M2 Charities Act 1992), or

(iii) by the High Court,

on the grounds of any misconduct or mismanagement in the administration of the charity for which he was responsible or to which he was privy, or which he by his conduct contributed to or facilitated;

(e) he has been removed, under section 7 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (powers of Court of Session to deal with management of charities) [F4 or section 34(5)(e) of the Charities and Trustee Investment (Scotland) Act 2005 (powers of the Court of Session)], from being concerned in the management or control of any body;

(f) he is subject to a disqualification order [F5 or disqualification undertaking] under the M3 Company Directors Disqualification Act 1986 [F5 to a disqualification order under Part II of the Companies (Northern Ireland) Order 1989] [F6 or disqualification undertaking under the Company Directors Disqualification (Northern Ireland) Order 2002] or to an order made under section 429(2)(b) of the M4 Insolvency Act 1986 (failure to pay under county court administration order).

(2) In subsection (1) above—

(a) paragraph (a) applies whether the conviction occurred before or after the commencement of that subsection, but does not apply in relation to any conviction which is a spent conviction for the purposes of the M5 Rehabilitation of Offenders Act 1974;

(b) paragraph (b) applies whether the adjudication of bankruptcy or the sequestration [F7 or the making of a bankruptcy restrictions order or an interim order] occurred before or after the commencement of that subsection;

(c) paragraph (c) applies whether the composition or arrangement was made, or the trust deed was granted, before or after the commencement of that subsection; and

(d) paragraphs (d) to (f) apply in relation to orders made and removals effected before or after the commencement of that subsection.

(3) Where (apart from this subsection) a person is disqualified under subsection (1)(b) above for being a charity trustee or trustee for any charity which is a company, he shall not be so disqualified if leave has been granted under section 11 of the M6 Company Directors Disqualification Act 1986 (undischarged bankrupts) for him to act as director of the charity; and similarly a person shall not be disqualified under subsection (1)(f) above for being a charity trustee or trustee for such a charity if—

[F8 (a) in the case of a person subject to a disqualification order or disqualification undertaking under the M7 Company Directors Disqualification Act 1986, leave for the purposes of section 1(1)(a) or 1A(1)(a) of that Act has been granted for him to act as director of the charity,

(aa) in the case of a person subject to a disqualification order under Part II of the Companies (Northern Ireland) Order 1989 [F9 or disqualification undertaking under the Company Directors Disqualification (Northern Ireland) Order 2002], leave has been granted by the High Court in Northern Ireland for him to act as director of the charity]

(b) in the case of a person subject to an order under section 429(2)(b) of the M8 Insolvency Act 1986, leave has been granted by the court which made the order for him to so act.

(4) [F10 The Commission] may, on the application of any person disqualified under subsection (1) above, waive his disqualification either generally or in relation to a particular charity or a particular class of charities; but no such waiver may be granted in relation to any charity which is a company if—

(a) the person concerned is for the time being prohibited, by virtue of—

(i) a disqualification order [F11 or disqualification undertaking] under the Company Directors Disqualification Act 1986, or

(ii) section 11(1) [F12 12(2)[F13 ,12A or 12B]] of that Act (undischarged bankrupts; failure to pay under county court administration order [F14 Northern Irish disqualification orders][F15 ; Northern Irish disqualification undertakings]),

from acting as director of the charity; and

(b) leave has not been granted for him to act as director of any other company.

[F16 (4A) If—

(a) a person disqualified under subsection (1)(d) or (e) makes an application under subsection (4) above five years or more after the date on which his disqualification took effect, and

(b) the Commission is not prevented from granting the application by virtue of paragraphs (a) and (b) of subsection (4),

the Commission must grant the application unless satisfied that, by reason of any special circumstances, it should be refused.]

(5) Any waiver under subsection (4) above shall be notified in writing to the person concerned.

(6) For the purposes of this section [F17 the Commission] shall keep, in such manner as [F18 it thinks fit], a register of all persons who have been removed from office as mentioned in subsection (1)(d) above either—

(a) by an order of the Commissioners made before or after the commencement of subsection (1) above, or

(b) by an order of [F19 the Commission or] the High Court made after the commencement of section 45(1) of the M9 Charities Act 1992;

and, where any person is so removed from office by an order of the High Court, the court shall notify [F20 the Commission] of his removal.

(7) The entries in the register kept under subsection (6) above shall be available for public inspection in legible form at all reasonable times.

[F21 (8) In this section “the Commissioners” means the Charity Commissioners for England and Wales.]

Textual Amendments

F2 Words in s. 72(1)(b) inserted (29.6.2006) by Enterprise Act 2002 (Disqualification from Office: General) Order 2006 (S.I. 2006/1722), art. 1(1), Sch. 2 para. 4(a)

F3 Words in s. 72(1)(d)(i) inserted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 156(2); S.I. 2007/309, art. 2, Sch.

F4 Words in s. 72(1)(e) inserted (1.4.2006) by Charities and Trustee Investment (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2006 (S.I. 2006/242), art. 1(3), Sch. para. 6(2)

F5 Words in s. 72(1)(f) inserted (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. II para. 18(a); S.I. 2001/766, art. 2(1)(a) (subject to transitional provisions in art. 3)

F6 Words in s. 72(1)(f) inserted (with application in accordance with art. 1(2) of the amending S.I.) by Insolvency Act 2000 (Company Directors Disqualification Undertakings) Order 2004 (S.I. 2004/1941), art. 1(2), Sch. para. 5(a)

F7 Words in s. 72(2)(b) inserted (29.6.2006) by Enterprise Act 2002 (Disqualification from Office: General) Order 2006 (S.I. 2006/1722), art. 1(1), Sch. 2 para. 4(b)

F8 S. 72(3)(a)(aa) substituted (2.4.2001) for s. 72(3)(a) by 2000 c. 39, s. 8, Sch. 4 Pt. II para. 18(b); S.I. 2001/766, art. 2(1)(a) (subject to transitional provisions in art. 3)

F9 Words in s. 72(3)(aa) inserted (with application in accordance with art. 1(2) of the amending S.I.) by Insolvency Act 2000 (Company Directors Disqualification Undertakings) Order 2004 (S.I. 2004/1941), art. 1(2), Sch. para. 5(b)

F10 Words in s. 72(4) substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 156(3); S.I. 2007/309, art. 2, Sch.

F11 Words in s. 72(4)(a)(i) inserted (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. II para. 18(c)(i); S.I. 2001/766, art. 2(1)(a) (subject to transitional provisions in art. 3)

F12 Words in s. 72(4)(a)(ii) substituted (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. II para. 18(c)(ii); S.I. 2001/766, art. 2(1)(a) (subject to transitional provisions in art. 3)

F13 Words in s. 72(4)(a)(ii) substituted (with application in accordance with art. 1(2) of the amending S.I.) by Insolvency Act 2000 (Company Directors Disqualification Undertakings) Order 2004 (S.I. 2004/1941), art. 1(2), Sch. para. 5(c)

F14 Words in s. 72(4)(a)(ii) inserted (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. II para. 18(c)(ii); S.I. 2001/766, art. 2(1)(a) (subject to transitional provisions in art. 3)

F15 Words in s. 72(4)(a)(ii) inserted (with application in accordance with art. 1(2) of the amending S.I.) by Insolvency Act 2000 (Company Directors Disqualification Undertakings) Order 2004 (S.I. 2004/1941), art. 1(2), Sch. para. 5(c)

F16 S. 72(4A) inserted (27.2.2007) by Charities Act 2006 (c. 50), ss. 35, 79(2) (with Sch. 10 para. 11); S.I. 2007/309, art. 2, Sch.

F17 Words in s. 72(6) substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 156(4)(a); S.I. 2007/309, art. 2, Sch.

F18 Words in s. 72(6) substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 156(4)(b); S.I. 2007/309, art. 2, Sch.

F19 Words in s. 72(6) inserted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 156(4)(c); S.I. 2007/309, art. 2, Sch.

F20 Words in s. 72(6) substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 156(4)(d); S.I. 2007/309, art. 2, Sch.

F21 S. 72(8) added (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 156(5); S.I. 2007/309, art. 2, Sch.

Marginal Citations

M1 1960 c. 58.

M2 1992 c. 41.

M3 1986 c. 46.

M4 1986 c. 45.

M5 1974 c. 53.

M6 1986 c. 46.

M7 1986 c. 46.

M8 1986 c. 45.

M9 1992 c. 41.

73 Person acting as charity trustee while disqualified. E+W

(1) Subject to subsection (2) below, any person who acts as a charity trustee or trustee for a charity while he is disqualified for being such a trustee by virtue of section 72 above shall be guilty of an offence and liable—

(a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or both.

(2) Subsection (1) above shall not apply where—

(a) the charity concerned is a company; and

(b) the disqualified person is disqualified by virtue only of paragraph (b) or (f) of section 72(1) above.

(3) Any acts done as charity trustee or trustee for a charity by a person disqualified for being such a trustee by virtue of section 72 above shall not be invalid by reason only of that disqualification.

(4) Where [F22 the Commission is] satisfied—

(a) that any person has acted as charity trustee or trustee for a charity (other than an exempt charity) while disqualified for being such a trustee by virtue of section 72 above, and

(b) that, while so acting, he has received from the charity any sums by way of remuneration or expenses, or any benefit in kind, in connection with his acting as charity trustee or trustee for the charity,

[F23 the Commission may by order] direct him to repay to the charity the whole or part of any such sums, or (as the case may be) to pay to the charity the whole or part of the monetary value [F24 (as determined by the Commission)] of any such benefit.

(5) Subsection (4) above does not apply to any sums received by way of remuneration or expenses in respect of any time when the person concerned was not disqualified for being a charity trustee or trustee for the charity.

Textual Amendments

F22 Words in s. 73(4) substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 157(a); S.I. 2007/309, art. 2, Sch.

F23 Words in s. 73(4) substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 157(b); S.I. 2007/309, art. 2, Sch.

F24 Words in s. 73(4) substituted (27.2.2007) by Charities Act 2006 (c. 50), s. 79(2), Sch. 8 para. 157(c); S.I. 2007/309, art. 2, Sch.

[F25 73D Power to relieve trustees, auditors etc. from liability for breach of trust or duty E+W

(1) This section applies to a person who is or has been—

(a) a charity trustee or trustee for a charity,

(b) a person appointed to audit a charity's accounts (whether appointed under an enactment or otherwise), or

(c) an independent examiner, reporting accountant or other person appointed to examine or report on a charity's accounts (whether appointed under an enactment or otherwise).

(2) If the Commission considers—

(a) that a person to whom this section applies is or may be personally liable for a breach of trust or breach of duty committed in his capacity as a person within paragraph (a), (b) or (c) of subsection (1) above, but

(b) that he has acted honestly and reasonably and ought fairly to be excused for the breach of trust or duty,

the Commission may make an order relieving him wholly or partly from any such liability.

(3) An order under subsection (2) above may grant the relief on such terms as the Commission thinks fit.

(4) Subsection (2) does not apply in relation to any personal contractual liability of a charity trustee or trustee for a charity.

(5) For the purposes of this section and section 73E below—

(a) subsection (1)(b) above is to be read as including a reference to the Auditor General for Wales acting as auditor under section 43B above, and

(b) subsection (1)(c) above is to be read as including a reference to the Auditor General for Wales acting as examiner under that section;

and in subsection (1)(b) and (c) any reference to a charity's accounts is to be read as including any group accounts prepared by the charity trustees of a charity.

(6) This section does not affect the operation of—

(a) section 61 of the Trustee Act 1925 (power of court to grant relief to trustees),

(b) section 727 of the Companies Act 1985 (power of court to grant relief to officers or auditors of companies), or

(c) section 73E below (which extends section 727 to auditors etc. of charities which are not companies).

Textual Amendments

F25 Ss. 73D, 73E inserted (27.2.2007 for specified purposes) by Charities Act 2006 (c. 50), ss. 38, 79(2) (with Sch. 10 para. 13); S.I. 2007/309, art. 2, Sch.

73E Court's power to grant relief to apply to all auditors etc. of charities which are not companies E+W

(1) Section 727 of the Companies Act 1985 (power of court to grant relief to officers or auditors of companies) shall have effect in relation to a person to whom this section applies as it has effect in relation to a person employed as an auditor by a company.

(2) This section applies to—

(a) a person acting in a capacity within section 73D(1)(b) or (c) above in a case where, apart from this section, section 727 would not apply in relation to him as a person so acting, and

(b) a charity trustee of a CIO.”]

Textual Amendments

F25 Ss. 73D, 73E inserted (27.2.2007 for specified purposes) by Charities Act 2006 (c. 50), ss. 38, 79(2) (with Sch. 10 para. 13); S.I. 2007/309, art. 2, Sch.

[F26 73F Trustees' indemnity insurance E+W

(1) The charity trustees of a charity may arrange for the purchase, out of the funds of the charity, of insurance designed to indemnify the charity trustees or any trustees for the charity against any personal liability in respect of—

(a) any breach of trust or breach of duty committed by them in their capacity as charity trustees or trustees for the charity, or

(b) any negligence, default, breach of duty or breach of trust committed by them in their capacity as directors or officers of the charity (if it is a body corporate) or of any body corporate carrying on any activities on behalf of the charity.

(2) The terms of such insurance must, however, be so framed as to exclude the provision of any indemnity for a person in respect of—

(a) any liability incurred by him to pay—

(i) a fine imposed in criminal proceedings, or

(ii) a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising);

(b) any liability incurred by him in defending any criminal proceedings in which he is convicted of an offence arising out of any fraud or dishonesty, or wilful or reckless misconduct, by him; or

(c) any liability incurred by him to the charity that arises out of any conduct which he knew (or must reasonably be assumed to have known) was not in the interests of the charity or in the case of which he did not care whether it was in the best interests of the charity or not.

(3) For the purposes of subsection (2)(b) above—

(a) the reference to any such conviction is a reference to one that has become final;

(b) a conviction becomes final—

(i) if not appealed against, at the end of the period for bringing an appeal, or

(ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of; and

(c) an appeal is disposed of—

(i) if it is determined and the period for bringing any further appeal has ended, or

(ii) if it is abandoned or otherwise ceases to have effect.

(4) The charity trustees of a charity may not purchase insurance under this section unless they decide that they are satisfied that it is in the best interests of the charity for them to do so.

(5) The duty of care in section 1(1) of the Trustee Act 2000 applies to a charity trustee when making such a decision.

(6) The Minister may by order make such amendments of subsections (2) and (3) above as he considers appropriate.

(7) No order may be made under subsection (6) above unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.

(8) This section—

(a) does not authorise the purchase of any insurance whose purchase is expressly prohibited by the trusts of the charity, but

(b) has effect despite any provision prohibiting the charity trustees or trustees for the charity receiving any personal benefit out of the funds of the charity.]

Textual Amendments

F26 S. 73F inserted (27.2.2007) by Charities Act 2006 (c. 50), ss. 39, 79(2); S.I. 2007/309, art. 2, Sch.