Charity

“Time goes by so slowly” sang Madonna in the Abba-infused Hung Up. For charities making certain changes, the current legislation can give that feeling. There is currently a consultation on a review of Scottish charity law. Our recent blog sets out the topics in the consultation. This blog looks at rules on the time that must elapse before changes to a charity take effect. They are not covered by the consultation. But these rules perhaps merit a refresh. In part the refresh is merited because of the efficient way in which many will experience the Office of the Scottish Charity Regulator deals with applications for actions that require its consent.

What’s the issue?

Under the Charities and Trustee Investment (Scotland) Act 2005 certain actions require OSCR’s consent before the charity can implement a change. The actions that need OSCR’s prior consent are: (1) changing its name; (2) amending its purposes; (3) amalgamating with another body; (4) winding itself up or dissolving itself; (5) applying to the court to do any of (2) to (4).

Where a charity proposes to take any of these actions it must, not less than 42 days before the date on which the action is to be taken, seek OSCR’s consent. OSCR must positively consent before a change of purposes can happen. For the other actions, OSCR is taken to have consented after 28 days unless it refuses consent or directs the action must be postponed.

There can be the potential for some frustration with these rules. Where OSCR promptly gives its consent to e.g. change purposes, the charity then has to wait until 42 day period elapses before the change can take effect.

A change… being able to take action once OSCR consent granted

One possible small, but useful change would be to allow a charity to take the proposed step as soon as OSCR has granted its consent. It will help the charity maintain the momentum to implement the change. The current consent timetable based on the 42 day period does set a tone of charities not rushing to make changes nor putting undue burdens on OSCR to consider and process applications. However, as the 2005 Act is being reviewed at the moment, a small tweak to the legislation on changes to charities that need OSCR approval might help further positively underpin a process that seems to work well in practice.

Alan Eccles

Partner at Brodies LLP
Alan is a Partner specialising in private client (succession, incapacity and asset protection) matters as well as the charities, third and impact sectors.
Alan Eccles