Most of the time you will be able to run your charity and make changes without involving the Charity Commission. However, there are some things you might want to do that will need permission. These are called legal permissions.
There are many reasons why you might need to obtain a legal permission from the Charity Commission. Here is a brief overview of the most common circumstances when you might need permission.
Change Your Governing Document
Keeping your governing document up to date helps to keep it relevant to what your charity does and how it does it. You do not need to get permission from the Charity Commission to make changes to your governing document if any of the following apply:
i) There is a clear power to make the change in your charity’s governing document
ii) The amendment can be made using powers available in the Charities Act
iii) Your charity is a charitable company and the amendment is allowed by the Companies Act.
All you need to do is make the changes correctly and, if your charity is registered, tell the Charity Commission so it can update the register of charities. If your charity is a company you will also need to tell Companies House about the change.
You cannot usually make changes without the Charity Commission’s permission if those changes will:
i) Change your charity’s purposes
ii) Allow you to spend money held as permanent endowment (ie money or property which was originally meant to be held by your charity forever)
iii) Authorise payments to trustees or related parties
iv) Alter certain third party rights.
The type of permission you need depends on your charity’s structure, its income and the change you want to make.
Pay Trustees or Related Parties
The principle of unpaid trusteeship is a defining characteristic of charities. For this reason the law limits the circumstances under which trustees can receive payment from their charity.
Trustees may only receive payment from their charity if there is a clear power to do so. Trustees can receive payment for legitimate expenses. They can also receive other payments where an express power exists, for example in the governing document or in statute.
The same principle applies to people who are ‘connected persons’. The Charities Act defines connected persons, which includes people or organisations closely associated with the charity.
Sell or Lease Property to Someone Connected to Your Charity
In many cases the law allows you to sell or lease your charity’s property without first having to obtain permission from the Charity Commission. However, there are circumstances under which you will require the Charity Commission’s consent. One example is where the sale or lease is to a connected person. This is to provide assurance that you have managed conflicts of interest appropriately, carried out the transaction openly and transparently and that it is in the best interests of the charity.