‘Am I disqualified from acting as a trustee?’
By giving your time, energy and commitment as the trustee of a charitable cause, you are making a vital contribution to society, and hopefully you find it personally rewarding. But despite very good intensions many people are unaware that they may be acting illegally. Some people are disqualified by the Charities Act from acting as trustees. You are disqualified if you:
- have been convicted of an offence
involving deception or dishonesty, and the conviction is unspent;
- are bankrupt, and have not been
discharged;
- have been removed from trusteeship of
a charity by the Court or the Commission for misconduct or mismanagement;
- have been disqualified as a company
director;
- have entered into a composition or
arrangement with your creditors, including an individual voluntary
arrangement (IVA), and are currently on the Insolvency Service Register.
In most cases you
are committing an offence if you act as a trustee while disqualified. The
Commission can grant a waiver under the Charities Act if there are good reasons
in the interests of the charity for allowing a disqualified person to be a
trustee. You can find out more from our staff guidance OG41 and OG42 on our website.
Before appointing
someone as a trustee, the trustee board should obtain a declaration from them
that they are not disqualified.
In addition, we
strongly recommend that charities working with children or vulnerable adults,
with positions which are eligible to obtain DBS checks should do so.
You can use our model
declaration form both for prospective trustees and existing
trustees (as their circumstances may have changed).
The charity should
also consult official registers of disqualified persons.
These include:
(1) The Individual Insolvency Register maintained by the Insolvency
Service, which contains details of:
·
bankruptcies
that are either current or have ended in the last three months;
·
current
individual voluntary arrangements and fast track voluntary arrangements; and
·
current
bankruptcy restriction orders and undertakings.
You can search the register on the Insolvency Service website, by visiting your local Official
Receiver’s office, or by post or fax.
(2) The register of disqualified directors maintained by Companies House. You
can search this register on the Companies House website.
(3) The Commission’s register of all persons who have been removed as a
charity trustee either by us or by the High Court since 1 January 1993. You can
search this register online.
If you are disqualified, it means you can’t act, but you are not
automatically removed. If you do participate in running the charity, you are
committing an offence. Decisions that you take part in may be invalid. You
remain responsible for the charity. You should formally resign to avoid this
situation.
If you or your fellow trustees don’t take these steps we are likely to find out. We use several
ways to monitor whether or not charities are checking the eligibility of their
trustees. Currently we are aware of up to a thousand trustees who may be
disqualified but have not resigned, and we are in the process of contacting
them.
If a charity
fails to take reasonable steps to ensure that its trustees are eligible to act,
all of the trustees will share responsibility for any financial loss or
reputational damage that happens as a result.
If you know that you are acting as a trustee when you are
disqualified take action now, resign
your position and ensure the
charity updates the trustee details HERE.
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