News
Designed to Deliver: Changes at OSCR
In our September edition of OSCR Reporter we outlined our move from a three team structure to the following four teams:
In September we appointed Laura Anderson as Acting Head of Enquiry & Investigations, and Martin Tyson as Acting Head of Charity Services. Both held existing roles within OSCR, and will undertake these roles until permanent appointments are made.
Earlier this week, our Senior Legal Adviser, Quentin Fisher, was appointed Acting Head of Policy and Development, following the departure of Marieke Dwarshuis who formerly headed up this team. Judith Hayhow remains Head of Corporate Services.
These structural changes are intended to allow even more effective delivery of our services, and improve our outreach with support groups, umbrella bodies and professional advisers, as well as strengthening our policy engagement.
Integrated Reporting: update
The public consultation on our Integrated Reporting proposals closed on 29 December 2009. The consultation proved very effective with over 100 people attending the User Group events, and 57 responses to the written consultation. A summary report of the responses will be published on our website in late February 2010. The responses we received show strong support for our proposals, with some helpful comments on how these can be refined and improved.
You can keep up to date with the project by visiting our Integrated Reporting web page here.
Charity trustee duties and legal responsibilities
All charity trustees have a responsibility to take such care of the charity's affairs ‘as is reasonable to expect of someone who is managing the affairs of another person'. The care and diligence this requires includes acting as guardians of the charity's assets and safeguarding the charity's reputation.
A recent HM Revenue and Customs (HMRC) report highlights tax avoidance schemes where charities could be targeted. Charities that become involved in such schemes could suffer both financial and reputational damage, and charity trustees need to be alert to this risk.
HMRC has produced an article which describes the schemes (Spotlight number 7) and provides some useful indicators. Click here to read the article.
Further information about charity trustees' duties and their legal responsibilities can be found in our publication Guidance for Charity Trustees ‘acting with care and diligence'. Click here to download this document.
Information for charitable companies: changes to the Companies Act 2006
With effect from 1 October 2009, the Companies Act 2006 introduced changes to the format of companies' governing documents (the Memorandum and Articles of Association). The Articles now include the company's objects and liabilities, which were previously found in the Memorandum.
Charitable companies must make sure that they meet the requirements of the Companies Act 2006 and the Charities and Trustee Investment (Scotland) Act 2005.
If you want to make changes to your charitable purposes (or ‘objects') you must first have our consent. If you want to make changes to any other aspect of the Memorandum and Articles of Association you must notify us within three months of the changes being made.
If your charitable company incorporated before 1 October 2009, the changes in the 2006 Act will only affect you if you want to make any amendments to your Memorandum and/or Articles of Association.
As well as meeting our requirements for consent or notification, you will need to be aware of the requirements of Companies House. To read the requirements, visit the Companies House website here.
Thinking about changing your charitable purposes?
It is a requirement of the Charities and Trustee Investment (Scotland) Act 2005 (the 2005 Act) that a charity seeks our consent in order to amend its constitution ‘so far as it relates to its purposes'.
What are changes ‘relating to its purposes'?
- Updating the wording. Many charities find that the wording of the purposes or objects in their founding documents has become outdated. Even if the overall charitable purpose of the charity may not be changing, they need our consent should they wish to amend or update the way the purposes are worded. This is because we must ensure that the revised objects or purposes meet one of the charitable purposes listed in section 7(2) of the 2005 Act.
- Adding or removing new purposes. There will be occasions where a charity expands its aims and activities. For example, a charity whose current charitable purpose is ‘advancing education' may decide to expand and become involved in ‘the prevention or relief of poverty'. This new or additional charitable purpose would have to be reflected in the charity's constitution, and an application for consent would be required in order to amend the purposes. Similarly, should a charity which has several purposes decide that one (or more) of its purposes is no longer relevant, it would need to seek our consent to amend the constitution in order to remove these.
- Other changes relating to purposes. Often, a charity's objects clause will include the locality where it intends to operate. For example, a charity's purposes may be ‘the relief of those in need by reason of age, ill-health or disability in North East Fife'. If this charity decided to expand and operate throughout the whole of Fife, then our consent would be required, as expanding the operating area is a change in relation to the charitable purposes. A similar change might be where there is a change to the recipient group benefiting from the charity's purposes. For example, the charitable purpose may be to provide advice and support to those suffering from a specific health condition. Should the charity decide to extend their activities in order to assist people with another health condition or conditions, this would also be regarded a change in relation to purposes which would also need our consent.
How to apply for our consent
An application for consent to amend the constitution in relation to purposes can be downloaded from our website here. Alternatively, we can send out a paper copy of the application form. As well as the form itself, we ask that applicants supply a copy of their current constitution, and a draft copy of the proposed new constitution, which should incorporate the planned changes.
When to apply
It is a requirement of the 2005 Act that charities give OSCR a minimum of 42 days notice. The application for consent should reach OSCR at least 42 days before the date the charity intends to adopt its new constitution.
What happens next?
A letter will be sent informing the charity of our decision. If consent is given, the charity can then adopt the amended constitution. The charity should, however, remember to notify us once the change has been made by sending a copy of the adopted constitution, as well as minutes of the meeting at which the changes were agreed or a signed resolution on behalf of the trustees, where appropriate.
Charity accounts
Under section 44 of the 2005 Act, all Scottish charities are required to submit a completed Annual Return form and a set of accounts on an annual basis.
The deadline for submitting the Annual Return form and accounts is nine months from the financial year end of the charity. Forty percent (40%) of registered charities have their financial year end as 31 March. As a result, we have just passed one of the peak times of the year for the receipt of charity Annual Returns and accounts. Any charity that has its financial year end set to 31 March and has not yet submitted its Annual Return and accounts should do so as soon as possible.
We will issue reminder letters to the primary contact of those charities that are late in returning their Annual Return form and accounts. It is the joint responsibility of all of the charity trustees to ensure that the correct information is sent to us within the deadline. This is an important aspect of charity trustees acting with care and diligence in the running of their charity.
In the event that we get no response from our reminders, we will contact the charity trustees to find out why the Annual Return form and accounts have not been submitted, and provide information to allow them to comply with the 2005 Act. If charity trustees do not provide us with the information that we require, the 2005 Act gives us powers to ensure that the charity complies with the legislation.
For further information about this subject, please read our Meeting Requirements web page here.
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Have your charity's details changed?
Charities have a duty to inform OSCR about the following changes no later than three months after the change has taken place.
You should tell us when:
- the Principal contact changes
- the contact details of the existing Principal Contact changes
- the accounting year end date has changed
- changes unrelated to purposes are made to the constitution
- when any change consented to by OSCR is implemented.
For more information on when you should contact OSCR please read our contact OSCR postcard.
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