The Charitable Incorporated Organisations (General) Regulations 2012

The following provisions apply for the purposes of these Regulations.

A document or information is sent or supplied in hard copy form if it is sent or supplied in a paper copy or similar form capable of being read and references to “hard copy” in these Regulations have a corresponding meaning.

The provisions of this regulation apply whether the provision of these Regulations in question uses the words “sent” or “supplied” or uses other words (such as “deliver”, “provide” “produce”, “transmit” or, in the case of notice, “give”) to refer to the sending or supplying of a document or information.

In their application to CIOs the following provisions of the 2011 Act are to be read subject to the modifications specified.

Sections 30 to 34 of that Act do not apply.

In section 38 of that Act (right to inspect register) for subsection (4) substitute—

This regulation applies in relation to any requirement for applicants to send documents or information to the Commission under section 207 of the 2011 Act (application for CIO to be constituted and registered)4.

Where a document or information is sent or supplied by the applicants by electronic means, it may only be sent or supplied to an address specified for the purpose by the Commission.

The charity trustees of each old CIO must, on registration of the new CIO, transfer the relevant accounting records to the charity trustees of the new CIO.

In paragraph (1) “relevant accounting records” means the accounting records which the charity trustees of the old CIO were, immediately before the registration of the new CIO, under a duty to preserve under section 131 of the 2011 Act (preservation of accounting records).

On transfer of the records in accordance with paragraph (1), the charity trustees of the old CIO shall be treated as having discharged their duty under section 131.

The charity trustees of a new CIO must preserve the records transferred to it under regulation 10 for at least 6 years from the end of the financial year in which the records were made (“the retention period”).

Subject to paragraph (3), where a new CIO is dissolved within the retention period, the obligation to preserve those records in accordance with this regulation is to continue to be discharged by the persons who were the charity trustees of the new CIO immediately before its dissolution.

Paragraph (2) does not apply if the Commission consents in writing to the records being destroyed or otherwise disposed of.

A CIO’s constitution must state the names of the persons who are to be the first charity trustees of the CIO.

In this regulation—

• “standard charity trustee provisions” means provision about—

  1. a

     how a charity trustee of the CIO retires from office;

  2. b

     the other circumstances in which a charity trustee of the CIO will cease to hold office and in particular, if the CIO’s constitution permits its members to remove a charity trustee from office, the circumstances in which a charity trustee may be removed from office and the procedure for doing so;

  3. c

     the holding of meetings of the charity trustees of the CIO and in particular—

     1. i

        the procedure for calling such meetings;

     2. ii

        the appointment of a chair of such meetings;

     3. iii

        the quorum for such meetings;

     4. iv

        if the charity trustees of the CIO are to have the right to demand a poll, the exercise of that right and the manner in which the poll is to be conducted; and

  4. d

     subject to compliance with section 222 of the 2011 Act and regulation 36, the extent to which a charity trustee of the CIO may, if at all, benefit personally from any arrangement or transaction entered into by the CIO.

• “standard member provisions” means provision about—

  1. a

     how a member retires from membership of the CIO;

  2. b

     the other circumstances in which, and method by which, a member’s membership of the CIO may or must be terminated; and

  3. c

     the holding of general meetings of its members and in particular—

     1. i

        the procedure for calling such meetings;

     2. ii

        the appointment of a chair of such meetings;

     3. iii

        the representation at such meetings of any body corporate who is a member of the CIO;

     4. iv

        the quorum for such meetings; and

     5. v

        if the members of the CIO are to have the right to demand a poll, the exercise of that right and the manner in which a poll is to be conducted.

If the CIO is to have a common seal, the constitution must make provision about the use of the seal.

If a CIO’s constitution permits its members to vote by post, the constitution must make provision about the circumstances in which, and the way in which, such votes may be given.

If a CIO’s constitution permits its members to make decisions at a general meeting otherwise than by voting on resolutions, the constitution must make provision as to the alternative process by which the members may make decisions at a general meeting.

If a CIO’s constitution permits its members to make decisions otherwise than at a general meeting, the constitution must make provision as to the alternative process by which the members may make decisions otherwise than at a general meeting.

If the members of a CIO are to have different voting rights, the constitution must state the voting rights which are to attach to each class of member.

If a CIO is to communicate with its members by means of a website, the constitution must make provision as to the circumstances in which a website may be used as a means of communication with its members.

If a CIO’s constitution requires more than one charity trustee to be in office for the business of the CIO to be discharged, the constitution must make provision indicating the minimum number of charity trustees that are to be in office to enable its business to be discharged.

If a CIO’s constitution is to permit its charity trustees to make decisions at a meeting otherwise than by voting on resolutions, the constitution must make provision as to the alternative process by which the charity trustees may make decisions at a meeting.

If a CIO’s constitution is to permit its charity trustees to make decisions otherwise than at a meeting, the constitution must make provision as to the alternative process by which the charity trustees may make decisions otherwise than at a meeting.

A CIO’s constitution may contain provision (“provision for entrenchment”) to the effect that specified provisions of the constitution may be amended or repealed by resolution of its members only if specified conditions are met, or specified procedures are complied with, that are more restrictive than those applied by section 224(2) of the 2011 Act (amendment of constitution by resolution of members).

Subject to paragraph (2), if a resolution under section 224 of the 2011 Act to amend a CIO’s constitution is passed otherwise than at a general meeting it is treated as having been passed on the date on which the last member agreed to it.

Paragraph (1) does not apply if a provision in the CIO’s constitution treats such a resolution as having been passed on a date later than the date on which the last member agreed to it.

This regulation applies where a CIO’s constitution contains provision for entrenchment.

If the CIO amends its constitution, it must send a statement of compliance to the Commission with the documents that it is required to send to the Commission by section 227(1) of the 2011 Act.

The Commission may rely on the statement of compliance as sufficient evidence of the matters stated in it.

In this regulation “statement of compliance” means a statement certifying that the amendment has been made in accordance with the provision for entrenchment.

A member of a CIO (“M”) is not bound by an amendment to its constitution after the date on which M became a member, if that amendment increases in any way M’s liability to contribute to the CIO’s assets if it is wound up.

Paragraph (1) does not apply if M agrees in writing, either before or after the amendment is made, to be bound by the amendment.

Any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of a CIO.

In favour of a purchaser a document is to be treated as duly executed by a CIO if it purports to be signed in accordance with paragraph (2).

For the purposes of paragraph (4), “purchaser” means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.

References in this regulation to a document being (or purporting to be) signed by a charity trustee are to be read, in a case where a body corporate is a charity trustee, as references to the document being (or purporting to be) signed by an individual authorised by the body corporate to sign on its behalf.

For the purposes of paragraph (1) a document is presumed, unless the contrary intention is proved, to be delivered upon its being executed.

In paragraph (3) “purchaser” has the meaning given by regulation 20(5).

A CIO may, by instrument executed as a deed, empower a person, either generally or in respect of specified matters, as its attorney to execute deeds or other documents on its behalf.

A deed or other document so executed, whether in the United Kingdom or elsewhere, has effect as if executed by the CIO.

A CIO may have a common seal but need not have one.

A CIO which has a common seal must have its name engraved in legible characters on the seal.

Subsections (3) and (5) of section 45 of the Companies Act 2006 (offence of failure to comply with requirements in relation to common seal)6 apply in relation to a failure by a CIO to comply with paragraph (2) as they apply in relation to a failure by a company to comply with subsection (2) of that section; and, in its application by virtue of this paragraph, subsection (3) of that section has effect as if paragraph (a) were omitted.

Subsections (4) and (5) of that section (offence of using etc. a seal which does not satisfy the necessary requirements) apply to the use, or authorisation of the use, of a seal of a CIO which does not comply with paragraph (2) as they apply to the use, or authorisation of the use, of a seal of a company which does not comply with subsection (2) of that section.

In its application to CIOs section 1121 has effect as if subsection (2) were omitted.

In its application to CIOs section 1122 has effect as if the following were substituted—

In its application to CIOs section 1132(3)(b) has effect as if for “the secretary of the company, or such other officer of it” there were substituted “such charity trustee of the CIO”.

A CIO that has a common seal may have an official seal for use outside the United Kingdom.

The official seal must be a facsimile of the CIO’s common seal, with the addition on its face of the place or places where it is to be used.

The official seal when duly affixed to a document has the same effect as the CIO’s common seal.

A CIO having an official seal may, by writing under its common seal, authorise any person appointed for the purpose to affix the official seal to any deed or other document to which the CIO is a party.

Every association CIO must keep a register of members in accordance with Part 1 of Schedule 1 and a register of charity trustees in accordance with Part 2 of Schedule 1.

Every foundation CIO must keep a register of charity trustees (who are also the members of the CIO) in accordance with Part 2 of Schedule 1.

Part 3 of Schedule 1 makes further provision about maintenance of and access to a CIO’s register or registers.

If a CIO fails to comply with a requirement imposed by Schedule 1 the Commission may, by order, give the charity trustees of the CIO such directions as it considers appropriate for securing that the default is made good.

Sections 336 and 337 of the 2011 Act (enforcement of and other provisions as to orders of the Commission)7 apply to an order made under paragraph (4) as they apply to an order made under section 52(1) of that Act (power to call for documents).

No order may be made under section 335 of the 2011 Act in respect of a CIO’s failure to comply with any requirement imposed by Schedule 1.

In regulations 27 to 30 a reference to a CIO’s register of members is, in the case of a foundation CIO, a reference to its register of charity trustees kept in accordance with Part 2 of Schedule 1.

Sections 336 and 337 of the 2011 Act (enforcement of and other provisions as to orders of the Commission) apply to an order made under paragraph (1) as they apply to an order made under section 52(1) of that Act (power to call for documents).

On such an application the court may also decide any question necessary or expedient to be decided for rectification of the register.

For the purposes of paragraph (3) references to members of a CIO include references to alleged members of a CIO.

This is without prejudice to any lesser period of limitation.

Only a person who has attained the age of 16 years is eligible to be appointed as a charity trustee of a CIO.

Paragraph (1) does not affect the validity of an appointment that is not to take effect until the person appointed attains that age.

Where the office of charity trustee of a CIO is held by a corporation sole, or otherwise by virtue of another office, the appointment to that other office of a person (“A”) who has not attained the age of 16 years is not effective also to make A a charity trustee of the CIO until A attains the age of 16 years.

Subject to paragraph (5), in any case where the operation of paragraph (3) means there is not a sufficient number of charity trustees to conduct the business of the relevant CIO in accordance with its constitution, the CIO may appoint such other person as it considers fit to act as charity trustee until A attains the age of 16 years.

An appointment of a charity trustee made in contravention of this regulation is void.

Nothing in this regulation affects the liability of a person (“A”) under any provision of these Regulations or the 2011 Act if A purports to act as a charity trustee of a CIO although A could not, by virtue of this regulation, be appointed as such a charity trustee.

This regulation does not affect the application of sections 183 and 184 of the 2011 Act (criminal and civil consequences of acting while disqualified).

The provisions of the Trustee Act 20008 (“the 2000 Act”) specified in paragraph (2) apply in relation to a CIO as they apply to a charitable trust but with the modifications specified in paragraph (3).

Benefits received by T from a person by whom T’s services (as charity trustee or otherwise) are provided to the CIO are not regarded as conferred by a third party.

This duty is not infringed if the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.

In this regulation “third party” means a person other than the CIO, an associated body corporate, or a person acting on behalf of the CIO or an associated body corporate.

This regulation applies to a resolution under section 224 (amendment of constitution and procedure) or 235 (application for amalgamation of CIOs) or 240 (resolutions about transfer of CIO’s undertaking to another CIO) of the 2011 Act9.

If a qualifying majority agrees, a resolution which is to be proposed at a general meeting may be passed without the requirements of paragraph (1) being satisfied.

In this regulation—

• “qualifying majority” means—

  1. a

     in relation to a CIO whose members take decisions by voting, a majority in number of the members having a right to attend and vote at the meeting, who together represent not less than the requisite percentage of the total voting rights at that meeting of all the members;

  2. b

     in relation to a CIO where the CIO’s constitution permits the members to make decisions otherwise than by voting, all of the members having the right to attend the meeting and take part in the decisions to be made at the meeting;

• “requisite percentage” means 90% or such higher percentage (not exceeding 95%) as may be specified in the CIO’s constitution for the purposes of this regulation.

Paragraph (1)(a) applies to any decision whether of the charity trustees of the CIO or its members.

The restrictions in paragraph (1) do not apply where the transaction or arrangement to be entered into by the CIO cannot reasonably be regarded as likely to give rise to a conflict of interest.

Nothing in this regulation affects the power of the Commission to authorise dealings with charity property etc. under section 105 of the 2011 Act.

The court or the Commission may order a meeting to be called, held and conducted in any such manner as the court or the Commission, as the case may be, thinks fit.

Where the court or the Commission makes an order under paragraph (2), the court or the Commission, as the case may be, may give such ancillary or consequential directions as it thinks expedient.

Directions under paragraph (3) may include a direction that one member of the CIO present at the meeting be treated as constituting a quorum.

A meeting called, held and conducted in accordance with an order made under this regulation is treated for all purposes as being a meeting of the CIO duly called, held and conducted.

The records must be kept for at least 6 years from the date of the meeting, resolution or decision, as the case may be.

The record of a resolution of the members passed otherwise than at a general meeting is evidence of the passing of the resolution if they purport to be signed by a charity trustee of the CIO.

The record of a decision of the members made otherwise than by resolution is evidence of the making of the decision if they purport to be signed by a charity trustee of the CIO.

This regulation applies to a CIO that has only one member.

Paragraph (2) does not apply if the member takes the relevant decision by way of a written resolution.

The records must be open to inspection by any member of the CIO without charge.

Any member may require a copy of the records on payment of such fee, if any, as the charity trustees of the CIO may reasonably require in respect of the costs of complying with the request.

Where the records are kept in electronic form, they must be capable of being reproduced in hard copy form.

In this regulation “CIO records” means any register, minutes or other document required by these Regulations to be kept by a CIO.

A document may be served on a person to whom this regulation applies by leaving it at, or sending it by post to, the person’s registered service address.

Nothing in this regulation is to be regarded as preventing the Commission from serving a document on an individual at the individual’s last address known to the Commission.

If a registered service address is changed after a person (“A”) inspected, or obtained a copy of, the relevant entry in the relevant register, A may validly serve a document at the previous registered service address until the end of the period of 14 days starting with the day on which A inspected, or obtained a copy of, as the case may be, that entry.

For the purposes of paragraph (6) “previous registered service address” means, in relation to a person, the service address which appeared in the entry relating to that person in the relevant register on the day on which A inspected, or obtained a copy of, that entry.

The provisions of this Part (“the CIO communications provisions”) have effect for the purposes of any charity law provision that authorises or requires documents or information to be sent or supplied by or to a CIO.

The CIO communications provisions apply whether the charity law provision in question uses the words “sent” or “supplied” or uses other words (such as “deliver”, “provide”, “produce”, “transmit” or, in the case of notice, “give”) to refer to the sending or supplying of a document or information.

For the purposes of paragraph (3), provision is not to be regarded as contrary to the CIO communications provisions by reason only of the fact that it expressly authorises a document or information to be sent or supplied in hard copy form, in electronic form or by means of a website.

Documents or information to be sent or supplied to a CIO must be sent or supplied in accordance with the provisions of Schedule 2.

Documents or information to be sent or supplied by a CIO must be sent or supplied in accordance with the provisions of Schedule 3.

The provisions referred to in Schedule 3 apply (and those referred to in Schedule 2 do not apply) in relation to a document or information that is to be sent or supplied by one CIO to another.

In this regulation “electronic address” means any address or number used for the purpose of sending or receiving documents or information by electronic means.

Where a member of a CIO (“M”) has received a document or information from the CIO otherwise than in hard copy form, M is entitled to require the CIO to send M a version of the document or information in hard copy form.

This regulation applies in relation to documents or information sent or supplied by a CIO.

For the purposes of paragraph (2) a document or information is properly addressed if it is addressed in accordance with paragraph 4 of Schedule 3.

For the purposes of paragraph (4) a document or information is properly addressed if it is addressed in accordance with paragraph 7 of Schedule 3.

This regulation has effect subject to any contrary provision agreed between the CIO and the intended recipient.

An agreement under this regulation may relate to all or any description of document or information to be sent or supplied to the Commission.

Documents or information in relation to which an agreement is in force under this regulation must be sent or supplied to the Commission in accordance with that agreement.

Subject to regulation 57, a document or information that is not properly delivered to the Commission is treated for the purposes of the provision requiring or authorising it to be sent or supplied to the Commission as not having been so sent or supplied.

No objection may be taken to the legal consequences of a document or information being accepted by the Commission under this regulation on the grounds that the requirements for proper delivery were not met.

For the purposes of any qualifying provision the period after the document or information is accepted does not count as a period during which there is a default in complying with the requirements for delivery.

In this regulation “qualifying provision” means a provision which imposes a daily default fine for failure to send or supply the document or information.

The Commission may accept a replacement for a document or information previously sent or supplied to it that did not comply with the requirements for proper delivery in regulation 56.

In the CIO communications provisions—

• “address” includes a number or address used for the purpose of sending or receiving documents or information by electronic means;

• “charity law provision” means any provision of—

  1. a

     the 2011 Act11;

  2. b

     these Regulations;

  3. c

     the Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 201212 (“the Dissolution Regulations”); or

  4. d

     a CIO’s constitution;

  but not the provisions of the Insolvency Act 1986 and subordinate legislation as applied in relation to CIOs by the Dissolution Regulations;

• “document” includes summons, notice, order or other legal process and registers.

References in the CIO communications provisions to documents or information being sent or supplied by or to a CIO include references to documents or information being sent or supplied by or to the charity trustees of a CIO acting on behalf of the CIO.

Section 993 of the Companies Act 2006 (offence of fraudulent trading)13 applies in relation to any activity of a CIO as it applies in relation to any business of a company.

In its application to CIOs section 1132(3)(b) has effect as if for “the secretary of the company, or such other officer of it” there were substituted “such charity trustee of the CIO”.

Sections 310 (pre-merger vesting declarations) and 312 (“transferor” and “transferee” etc in s.310 and s.311) of the 2011 Act apply in relation to a relevant charity merger under Part 16 of that Act where the transferee is a CIO with the following modifications.

In section 312 in subsection (1) omit the words from “and (b)” to the end of the subsection.

Where a CIO holds specified trust property as trustee by virtue of section 310 as modified by this regulation, the CIO is to be treated for the purposes of the provisions identified in paragraph 3 of Schedule 7 to the 2011 Act (application of certain enactments to trust corporations) as if it were a corporation appointed by the court to be trustee.

This regulation applies where a CIO elects under section 133 of the 2011 Act to prepare a receipts and payments account and a statement of assets and liabilities, instead of a statement of accounts.