The Regulator for Charities in England and Wales

OPERATIONAL GUIDANCE

SMALL CHARITIES: DISSOLUTIONS AND REMOVALS FROM THE REGISTER

LETTER TO USE WHEN AN ENQUIRY HAS BEEN RECEIVED CONCERNING DISSOLVING A CHARITY

OG 202 L1 – 5 July 2006

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  Dear Sir / Madam
   
  Dissolving a charity
   
  Thank you for your enquiry about winding up a charity.
  When the members or the trustees of a charity have decided that the charity should be wound up the trustees may find that:
 
  • There is a power in the charity’s governing document for it to be wound up; or
 
  • There is no power to wind up but all the charity’s funds are expendable.
   
  There is a power in the charity’s governing document for it to be wound up:
  In this situation the trustees must follow the procedure set out in the governing document. This may involve calling a meeting of all the members of the charity to discuss the proposed winding up, or simply a final meeting of the trustees. The governing document will usually direct how the charity’s remaining assets should be used. Often the direction says that the assets should be passed to a charity with similar objects.
  If the trustees cannot follow the direction because it is unworkable, for example if the charity intended to receive the assets itself no longer exists, please contact us for further advice.
  The governing document may also require you to ask for our approval. In all cases we would prefer if you completed the declaration form (CSD 1344B) enclosed with this letter and returned it to the above address, we will then remove the charity from our Register or contact you further if we need your assistance.
   
  There is no specific power to wind up but all the charity’s funds are expendable:
  In this situation it may be open to the trustees to bring the charity to an end by simply applying all its assets in furthering its objects (for example by passing these assets to another similar charity) and ensuring that all liabilities have been met. Having done so the trustees should complete the declaration form (CSD 1344B) enclosed with this letter and return it to us. This will enable us to remove the charity from the Register.
   
  Other legal requirements:
  The trustees of a charity that is winding up should be aware of the following legal requirement:
  After a charity has been wound up the trustees have to arrange for its accounting books and records to be preserved for a t least six years after the year in which they were made. If the charity’s property has been transferred to another charity we recommend that the recipient charity be asked to hold the records. Otherwise, the trustees may be able to arrange for the records to be held by a former trustee, a solicitor, or accountant, another local charity or an umbrella body. The trustees also need to ensure that any grants or donations the charity has received for use for a specific purpose are either returned to the grantor or donor or the grantor or donor agrees to the application of the assets on winding up.
   
  Where your charity has no power to wind up and/or all of its funds are not expendable please consider the content of our attached guidance (CSD 1344A).
   
  Yours faithfully

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