The Charities Bill has received Royal Assent following a two-year journey through Parliament which ended with a debate in the House of Lords earlier this month. Known as the Charities Act 2006, this new legislation aims to reduce the bureaucracy faced by charities and create opportunities for them to work in new ways. A number of the Acts provisions will have implications for the arts sector, including the introduction of a new legal structure, the Charitable Incorporated Organisation (CIO), aimed at charities wanting to set up as corporate entities with limited liability.
Such organisations currently have to meet the requirements of both the Charity Commission and Companies House, but a CIO structure promises to offer many of the advantages of incorporation, such as reduced personal liability for trustees, without the burden of dual regulation. The Act will be implemented in stages with only a few provisions coming into force immediately. Over the next two years, the Government and the Charity Commission will be consulting on regulations and guidance to determine how the Act is affecting charities in practice. Sean Egan, Head of Theatre and Arts at Bates, Wells and Braithwaite Solicitors, said, The Charities Act is not likely to have an immediate impact on arts organisations. There are some helpful provisions which, for instance, will mean that some charities can avoid changing their constitutions to take out Trustee Indemnity Insurance or paying trustees for their professional services. In practice it is in the formation of new charities and those reviewing their constitutions for whom the changes are likely to be most useful.
Published: 20-11-2006