Chapter DMBM585220

Record NumberDMBM585220
Published date29 April 2016
Types of charity

A charity can be either:

  • a charitable company
  • an unincorporated charity/charitable association.

It is therefore necessary to establish beyond doubt the type of charity you are dealing with before taking action.

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Charitable company

A charitable company means a charity which is a company formed and registered under the Companies Acts or to which the provisions of the Acts apply.

Where a charity is a company incorporated under the Companies Acts, the company is liable for the debts incurred. The directors have no personal liability for the company’s debts, but you can still write to them or interview them.

Charitable companies are “legal persons” and where there are sufficient assets you can distrain on these companies. County court proceedings can also be taken against such charitable companies, just as you would with any other company.

Where, in England & Wales, county court proceedings are taken you can warn the directors that you may consider applying to the court for an order to obtain information from an officer of a judgment debtor company. This means that they will have to attend court to answer questions, on oath, as to the company’s ability to pay the judgment debt (see DMBM666570).

In Scotland summary warrant action may be appropriate, or the case may be appropriate for referral direct to EIS Edinburgh.

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Unincorporated charity/charitable association

An unincorporated charity means a charitable trust or association. Unless individual members of an unincorporated association have entered into an agreement with HMRC in their personal capacity (in connection with the activities of the unincorporated association) there is no scope for recovery from members of an unincorporated charitable association personally.

However, charity trustees (who may also be members) have a greater role and have a duty to act prudently in administering the affairs of the charity and are responsible for ensuring that a charity fulfils its legal obligations. As such, trustees can be held personally accountable for properly determined liabilities of a charitable trust in most instances.

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Recovery action England & Wales

You will find the Charity Commission website, is a useful place to look for information about a charity. The website will frequently give you details of the charity’s own website and a contact name and address for communications with the charity, which may be different from the name/address we have on...

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