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Charities Update - Annual Reporting, Changes and Requirements (Part Two)

Along with the reporting changes covered in Part One there are some other changes to be aware of. These come from the changes to the Charities Act 2005 and relate more to operational requirements rather than financial and reporting.

Governance

The key part of this is to encourage a review of your charity and its governance more regularly (I’ve seen constitutions still being used dated from the 1920’s). The changes to the Charities Act mean every charity now needs to review its Governance every 3 years. This is self-directed and will vary for each charity.

 

Key thoughts when looking to review your Charities governance:

-            Is it Fit for purpose

-            Does it assist the charity to achieve its charitable purpose

-            Does it assist the charity to comply with the Charities Act 2005

Charities Services have produced a governance checklist to help guide charities through what might be included in this process. You can find it here.

Officers

The next big change is around who is considered an officer in your charity. This definition has been broadened (no longer covers just the Chairperson, Secretary and Treasurer etc.)

An officer can now be considered anyone:

-            Who occupies a position in the charity; and

-            Can exercise significant influence over substantial decisions.

-            This may include your manager, chief executive or chief financial officer.

Incorporated Societies

Along with the changes to the Charities Act 2005 the Incorporated Societies Act 1908 has also been replaced by the Incorporated Societies Act 2022 means charities registered as an incorporated society may have additional requirements with the companies office who manage the incorporated societies register. The new Act came into effect on 5 October 2023.Key comparisons between the Act can be found here.

  •  All incorporated societies need to re-register with the companies office. Before re-registering you may need to review and update your rules and processes to ensure these meet the requirements of the new Act.  

  • You are now required to have a governing body (committee), and this must comprise a minimum of 3 people. These people are all officers, and the majority must also be members of the society.

  • A dispute resolution process is now required to be included in your constitution.

  • There are also new financial reporting requirements which may be in addition to the charities requirements above if you are both an incorporated society and a registered charity.

  • There is a minimum membership requirement of 10 members and a register of members must be kept.

 

If you have questions or are unsure about your requirements or need help to get up to speed, please reach out and we can help. Charities Services also have a huge library of resources and can help you on a case-by-case basis.



 

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