If the DSA is “Incorporated” it is a legal entity, CC43 para 4 would allow “property” (which includes investments) to be vested in the name of the charity.  

 

The draft Constitution does not mention incorporation. In this case, as an “Unincorporated” body, CC14 para 21 says that the DSA is not a legal entity. It then follows that our property, ie the M&G Charifund Units, cannot be held by the “DSA” but must be held personally in the names of the members of the Council. To avoid having all the members of the council registered with M&G, CC14 para 21-25 and CC42 permit the appointment of a reduced number of the members of Council as “Nominees” or “Holding Trustees”.   The Charifund units would have to be held in their individual names. Alternatively a “Custodian” may be appointed. This seems to be some financial services or legal body which would charge fees for the service.

 

All this appears in para 26 (1)(b) of the draft Constitution where the Council must ensure that “all investments … are vested either in a corporation entitled to act as a Custodian Trustee or in not less than three individuals appointed by the Council as Holding Trustees”.

 

At present, the Charifund units are in the name of the DSA and the share certificates are in safe keeping at the HSBC Newbury branch. As an unincorporated charity this does not meet the current Charity Commission requirements

 

We would seem to have three choices: 

1 To appoint a Custodian Trustee and re-register the Charifund units in its name

2 To appoint 3 members of the Council as Holding Trustees and re-register the Charifund units in their individual names.

3 To apply to the Charity Commission for Incorporation. From CC43 this seems straightforward and does not mean any change of liability or other disadvantages. However, a main advantage of incorporation is quoted in CC43 para 4 as “Property is vested in the name of the incorporated body. This avoids the need for the execution of deeds transferring investments to new names whenever new holding trustees are appointed”.   

 

I recommend that we investigate option 3

 

 

Roy Wood

Hon Treasurer

30 Sep 07

 

References

CC14 Investment of Charitable Funds: Basic Principles

CC42 Appointing Nominees and Custodians

CC43 Incorporation of Charity Trustees.