PART V
SMALL CHARITIES
19.
—(1) This section shall apply to a charity if —
(a)
its gross income in its last financial year did not exceed $20,000; and
(b)
it does not hold any land on trusts which stipulate that the land is to be used for the purpose, or any particular purpose, of the charity,
and it is neither an exempt charity nor a charitable company.
(2) Subject to the following provisions of this section, the governing board members of a charity to which this section applies may resolve for the purposes of this section —
(a)
that all the property of the charity should be transferred to such other charity as is specified in the resolution, being either a registered charity or a charity which is not required to be registered;
(b)
that all the property of the charity should be divided, in such manner as is specified in the resolution, between such 2 or more other charities as are so specified, being in each case either a registered charity or a charity which is not required to be registered;
(c)
that the governing instruments of the charity should be modified by replacing all or any of the purposes of the charity with such other purposes, being in law charitable, as are specified in the resolution;
(d)
that any provision of the governing instruments of the charity —
(i)
relating to any of the powers exercisable by the governing board members in the administration of the charity; or
(ii)
regulating the procedure to be followed in any respect in connection with its administration,
should be modified in such manner as is specified in the resolution.
(3) Any resolution passed under subsection (2) must be passed by a majority of not less than two-thirds of such governing board members present and voting on the resolution.
(4) The governing board members of a charity to which this section applies (referred to in this Act as the transferor charity) shall not have power to pass a resolution under subsection (2)(a) or (b) unless they are satisfied —
(a)
that the existing purposes of the transferor charity have ceased to be conducive to a suitable and effective application of the charity’s resources; and
(b)
that the purposes of the charity or charities specified in the resolution are as similar in character to the purposes of the transferor charity as is reasonably practicable,
and before passing the resolution they must have received from the governing board members of the charity, or (as the case may be) of each of the charities, specified in the resolution written confirmation that those governing board members are willing to accept a transfer of property under this section.
(5) The governing board members of any such charity shall not have power to pass a resolution under subsection (2)(c) unless they are satisfied —
(a)
that the existing purposes of the charity (or, as the case may be, such of them as it is proposed to replace) have ceased to be conducive to a suitable and effective application of the charity’s resources; and
(b)
that the purposes specified in the resolution are as similar in character to those existing purposes as is practical in the circumstances.
(6) Where governing board members have passed a resolution under subsection (2), they shall —
(a)
give public notice of the resolution in such manner as they think reasonable in the circumstances; and
(b)
send a copy of the resolution to the Commissioner, together with a statement of their reasons for passing it.
(7) The Commissioner may, when considering the resolution, require the governing board members to provide additional information or explanation —
(a)
as to the circumstances in and by reference to which they have determined to act under this section; or
(b)
relating to their compliance with this section in connection with the resolution,
and the Commissioner shall take into account any representations made to him by persons appearing to him to be interested in the charity where those representations are made within the period of 6 weeks beginning with the date when the Commissioner receives a copy of the resolution by virtue of subsection (6)(b).
(8) Where the Commissioner has so received a copy of a resolution from any governing board members and it appears to him that they have complied with this section in connection with the resolution, the Commissioner shall, within the period of 3 months beginning with the date when he receives the copy of the resolution, notify them in writing either —
(a)
that the Commissioner concurs with the resolution; or
(b)
that he does not concur with it.
(9) Where the Commissioner so notifies his concurrence with the resolution, then —
(a)
if the resolution was passed under subsection (2)(a) or (b), the governing board members shall arrange for all the property of the transferor charity to be transferred in accordance with the resolution and on terms that any property so transferred —
(i)
shall be held and applied by the charity to which it is transferred (referred to in this Act as the transferee charity) for the purposes of that charity; but
(ii)
shall, as property of the transferee charity, nevertheless be subject to any restrictions on expenditure to which it is subject as property of the transferor charity,
and those governing board members shall arrange for it to be so transferred by such date as may be specified in the notification; and
(b)
if the resolution was passed under subsection (2)(c) or (d), the governing instruments of the charity shall be deemed, as from such date as may be specified in the notification, to have been modified in accordance with the terms of the resolution.
(10) For the purpose of enabling any property to be transferred to a charity under this section, the Commissioner shall have the power, at the request of the governing board members of that charity, to make orders vesting any property of the transferor charity —
(a)
in the governing board members of the first-mentioned charity or in any trustee for that charity; or
(b)
in any other person nominated by those governing board members to hold the property in trust for that charity.
(11) The Minister may by order amend subsection (1)(a) by substituting a different sum for the sum for the time being specified therein.
(12) In this section, references to the transfer of property to a charity are references to its transfer —
(a)
to the governing board members;
(b)
to any trustee for the charity; or
(c)
to a person nominated by the governing board members to hold it in trust for the charity,
as the governing board members may determine.
[UK Charities Act 1993, s. 74]
20.
—(1) This section shall apply to a charity if —
(a)
it has a permanent endowment which does not consist of or comprise any land; and
(b)
its gross income in its last financial year did not exceed $5,000,
and it is neither an exempt charity nor a charitable company.
(2) Where the governing board members of a charity to which this section applies are of the opinion that the property of the charity is too small, in relation to its purposes, for any useful purpose to be achieved by the expenditure of income alone, they may resolve for the purposes of this section that the charity ought to be freed from the restrictions with respect to expenditure of capital to which its permanent endowment is subject.
(3) Any resolution passed under subsection (2) must be passed by a majority of not less than two-thirds of such governing board members present and voting on the resolution.
(4) Before passing such a resolution, the governing board members must consider whether any reasonable possibility exists of effecting a transfer or division of all the charity’s property under section 19 (disregarding any such transfer or division as would, in their opinion, impose on the charity an unacceptable burden of costs).
(5) Where governing board members have passed a resolution under subsection (2), they shall —
(a)
give public notice of the resolution in such manner as they think reasonable in the circumstances; and
(b)
send a copy of the resolution to the Commissioner, together with a statement of their reasons for passing it.
(6) The Commissioner may, when considering the resolution, require the governing board members to provide additional information or explanation —
(a)
as to the circumstances in and by reference to which they have determined to act under this section; or
(b)
relating to their compliance with this section in connection with the resolution,
and the Commissioner shall take into account any representations made to him by persons appearing to him to be interested in the charity where those representations are made within the period of 6 weeks beginning with the date when the Commissioner receives a copy of the resolution by virtue of subsection (5)(b).
(7) Where the Commissioner has so received a copy of a resolution from any governing board members and it appears to him that they have complied with this section in connection with the resolution, the Commissioner shall, within the period of 3 months beginning with the date when he receives the copy of the resolution, notify them in writing either —
(a)
that the Commissioner concurs with the resolution; or
(b)
that he does not concur with it.
(8) Where the Commissioner so notifies his concurrence with the resolution, the governing board members shall have, as from such date as may be specified in the notification, power by virtue of this section to expend any property of the charity without regard to any such restrictions as are mentioned in subsection (2).
(9) The Minister may by order amend subsection (1)(b) by substituting a different sum for the sum for the time being specified therein.
(10) A charity shall be deemed for the purposes of this section to have a permanent endowment unless all property held for the purposes of the charity may be expended for those purposes without distinction between capital and income, and in this section “permanent endowment” means, in relation to any charity, property held subject to a restriction on its being expended for the purposes of the charity.
[UK Charities Act 1993, s. 75]