Charity Formation & Incorporation

If you are considering setting up a new charity, or you would like to discuss changing the structure of your existing charity, we can help. We routinely advise on the establishment of new charities, and have extensive experience dealing with the Charity Commission.

Charity formation

We understand that there is a huge amount of work involved in getting any new venture off the ground, and new charities are no exception. The legal process can often become an overwhelming added burden and a distraction from everything else you need to get done. Our experienced team of charity lawyers can help ease this burden, and support you through a smooth charity registration process.

Our services are tailored to suit your specific requirements. As such, if you are interested in our services we will send you a brief scoping questionnaire to complete and return. This allows us to consider your needs and provide you with a bespoke proposal and fee estimate, setting out clearly what is included for the fee quoted.

Typically, clients require the following advice:

• Advice on the different legal structures available, the advantages and disadvantages of each, and recommendations as to which structure will best suit your purposes
• Advice and general guidance and support on the process, timescales and legal requirements, including in particular the public benefit requirement and how this interplays with any “personal benefits” for the founder, proposed trustees or persons connected with them
• Advice on framing the charitable objects to reflect your intended activities
• Drafting a suitable governing document to meet your specific requirements
• For charitable companies, a fixed fee company formation service
• Drafting and submitting an application to register the new charity with the Charity Commission
• Dealing with any enquiries raised by the Charity Commission

We are also always happy to support clients who have got as far as receiving enquiries from the Charity Commission without legal advice and simply need some support to respond to specific queries raised, or clients who have had their application rejected by the Commission and would like some help to re-apply.

To help our clients to keep costs to a minimum, we have delivered a webinar on setting up a charity or a social enterprise, which is available to watch on our Birketts YouTube channel here. This webinar is intended to provide high level guidance on the core structuring options, to help you decide (a) whether setting up a charity is right for your aims and objectives, and if so (b) which legal form will be most suitable for your charity. The clearer you are as to what you want when you come to us, the more cost effective our services will be for you.

We understand that costs can be a concern when setting up a new charity. However, due to the huge diversity within the sector we do not routinely offer fixed fees for charity formation work. However, for very simple new charities where we can scope the work to our mutual satisfaction, we will always be willing to consider offering fixed fees in provide you with the comfort of cost certainty.

Incorporating existing charities

Many charities are structured as charitable trusts or unincorporated associations. If you are a trustee of such a charity, then you and your fellow trustees are personally liable for the obligations of the charity. All property is held and all contracts are entered into in the names of the individual trustees (or holding trustees).

Subject to acting properly, the trustees have a right of indemnity from the charity’s assets to meet any liability incurred on charitable business. However, this is reliable only to the extent there are assets available to meet claims. Although insurance and good risk management helps to reduce risk, it is not possible to eliminate all contractual and third party risk.

Concern about risk and liability can mean that trustees feel more inclined to take a conservative view on decision making that might not be best for the charity. In addition, if people are concerned about their personal liability when they are invited to become trustees, unincorporated status can be an impediment to the effective recruitment of new trustees.

As a result of these issues, it is very common for the trustees of unincorporated charities to seek advice from us on changing the legal structure of their charity (typically) to that of a charitable company or a Charitable Incorporated Organisation (CIO).

The process for this involves setting up a new incorporated charity and then transferring all of the assets, operations, staff, properties, contracts and liabilities of the unincorporated charity to it. Depending on the size and nature of the charity, this can be a lengthy and complex process and most charities require legal support.

As with our charity formation services, our charity incorporation services are tailored to suit your specific requirements. As such, if you are interested in our services we will send you a brief scoping questionnaire to complete and return. This allows us to consider your needs and provide you with a bespoke proposal and fee estimate, setting out clearly what is included for the fee quoted.

Typically, clients require the following advice:

• Setting up the new incorporated charity (see details of our charity formation services above)
• Advising on the process and any key consents required, which can include approval from the charity’s membership and other key stakeholders and third parties
• Applying to the Charity Commission for all necessary consents
• Identifying and advising on the legal requirements for the transfer of all assets, staff, properties, contracts and operations of the unincorporated charity to the new charity
• Drafting an asset transfer agreement and all ancillary documentation required to effect the transfer, which can include various deeds, notices, and other transfer forms depending on the assets involved
• Preparing outline draft minutes for the meetings of both the unincorporated and new incorporated charities to approve the transaction, and in some cases advising on the requirements to call a meeting of the members and drafting the necessary notices and resolutions to be passed
• Dealing with all necessary post-completion filings, including with the Charity Commission, Companies House (if applicable), HMRC (if applicable) and HM Land Registry (if applicable).