New powers for the Charity Commission to curb the registration of charities “with unsuitable name” is among a raft of new legislation to come into force this week.
The measures came into force on 14 June and have been introduced through the Charities Act 2022, which received Royal Assent in February.
Under the Act the regulator has the power to delay registration of a charity “with an unsuitable name” as well as for those looking to change their name. This also applies to exempt charities. Crucially this applies to a charity’s official as well as working name, if it is “too similar to another charity’s name or is offensive or misleading”.
According to a blog post on the issue from law firm Keystone Law, the move has been made as while the Commission could already force a charity to change its official name there had been a “loophole that enables an organisation to continue using a misleading or offensive working name”.
“Using inappropriate or misleading working names was seen as tarnishing the reputation of charities generally,” adds the firm.
Other changes introduced through the Act to come into force from this week include simpler legal requirements for trustees waning to sell, transfer or lease land. For example, the category of designated advisers who can provide charities with advice on certain disposals of land has been widened. A trustee, officer or staff member can provide advice if they meet relevant requirements, according to the commission.
In addition, there are new powers over their use of a permanent endowment that enable:
• charities to spend, in certain circumstances, a proportion or all their permanent endowment fund where the market value of the fund is (£25,000 or less) without Commission authorisation.
• charities to borrow, in certain circumstances, up to 25% of the value of their permanent endowment fund without Commission authorisation.
• charities that have opted into a total return approach to investment to use permanent endowment to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains.
The latest set of changes introduced by the Charities Act 2022 have come into force, giving new powers and flexibilities to charities.
— Charity Commission (@ChtyCommission) June 14, 2023
Find out what this means for you and your charity: https://t.co/9jYQ8fDGlG pic.twitter.com/dHznxEuNMN
“The latest changes introduced by the Charities Act 2022 give the charities we regulate more flexibility and greater powers,” said Aarti Thakor, the Commission’s director of legal and accounting services.
“These are positive changes that will impact a significant number of charities, so it is important all organisations, big or small, take the time to check what this means for them.
“This is especially important if they are looking, for example, to dispose of land. We have updated our guidance to help trustees understand the changes, and our contact centre is open to those who need further support.”
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