There are some key points to take from this:-
- SCIOs are exceptionally popular… but quantity does not necessarily mean quality and we hope that as well as being charity test passing these SCIOs are developing a constitutional and governance set up that is right for each individual charity. The use of so-called “model” constitutions can be dangerous and this has proved to be the case in the past with, for example, “model” company articles of association- they “work” until they (unexpectedly and potentially dramatically) do not work. On the whole, a carefully considered SCIO constitution is likely to be the best type of constitution and legal form available to Scottish charities.
- Trusts are now very unusual and rare. Is the trust dead? Nearly, it would seem. Probably right.
- Unincorporated associations (generally a bad legal form to have) remain stubbornly popular, but at least in recent months they have dropped off a little. We have recently looked at (with the help of Leicester City and the Hitchhiker’s Guide to the Galaxy) the risks of being an unincorporated association.
- Companies are still holding up and that is entirely fair… there remain good reasons to use companies and SCIOs should not be seen as a direct replacement for companies. They do have some key different characteristics.
- Community Interest Companies (CICs) are relatively popular. They are of course not charities. They do have their uses, but organisations should carefully consider if a CIC can really give them want they need. The apparent “hybrid” nature of a CIC might not give the best of both (charitable and private commercial) worlds. Saying that, a well-thought use of a CIC can be really powerful.
On legal form and constitutions, the new OSCR Annual Return asks charities to state when they last reviewed their constitution. To help answer that best, we are offering all charities a FREE meeting to look at this very point. Helping charities kick off the new “Targeted Regulation” regime on the right governance foot. Email or call Alan Eccles to arrange your meeting.
On June 16, 2016