OG 501 Orders

Last reviewed:
1 December 2014
Last updated:
1 December 2014

Policy Statement/Overview

An Order is a legal document produced by the Commission. We can make an Order to give a charity's trustees the power to carry out an action where there is no suitable power available to the trustees. We can make an Order to carry out actions that trustees are unable to do. We can also use our Order making powers to take action to improve the governance and effectiveness of a charity as part of our regulatory powers. (This guidance deals only with Orders we make as part of our enabling work. OG117 gives details of how we use our Order making powers in the context of our Investigations work.)

The Charities Act requires that we must use our resources in the most efficient, effective and economic way. Because of this, our policy is that:

We will only make an Order where there is no suitable power available to the trustees, either explicit or implied, and where the trustees cannot use a power of amendment to adopt the necessary power.

Summary of the guidance

This guidance is intended to help caseworkers to:

  • advise trustees where they are considering carrying out an action where they may not have the necessary power
  • decide if we are able, and prepared, to make an Order
  • decide if we need to give notice of our intention to make an Order

This guidance also sets out the legal basis behind our Order making powers and the legal requirements we must follow when making an Order.

This guidance does not deal with the particular circumstances that might lead to us making an Order to authorise a specific action. Details of these will be found in the guidance for the relevant type of work (for example, OG548 for land transactions and CC13 for vesting in the OC).    

This guidance should be read in conjunction with the manual - Order Procedures and Practice. This gives further details of the processes involved when making an Order and includes model text for emails, notices and Orders.

This guidance deals with Orders we make as part of our enabling work. OG117-7 gives details of how we use our Order making powers in the context of our Investigations work.

OG Contents (Site map)

Casework guidance

B1 Caseworking key points

  • We will only make an Order for a charity where there is no other suitable power available to the trustees.
  • We will not make an Order where the trustees have the power to take the proposed action or can give themselves a suitable power by using a power of amendment.
  • We will not make a 'comfort' Order to confirm an existing power. If there is any doubt about the existence or extent of a suitable power we might think it appropriate to give s110 advice to confirm this.
  • Orders under s105 are discretionary and we can refuse to make an Order if we do not think that there is any justification to make the Order.
  • Before making a s105 Order we must be satisfied that the proposed action is expedient in the interests of the charity
  • Certain Orders affecting the rights of individuals in relation to a charity require personal notice to be given before the Order is made. 
  • We cannot make an Order to remove a charity trustee without first giving public notice, unless we decide that, for any reason, this is not necessary.
  • We can make an Order on paper or electronically, in an email.
  • An Order takes effect when the name of an Authorised Officer is added and the Order is dated.
  • We can discharge an Order, within 12 months of the date it was made, where this was made in error. We do this by making a second Order.
  • We can make a ‘blanket’ Order to authorise multiple similar actions, in certain circumstances.
  • We can vary or revoke any Order, by making a second Order.

B2 What do we do when asked to advise regarding the making of an Order?

If we are approached by a charity's trustees who are looking for authority to carry out an act for which they claim not to have authority, we must first of all decide if this is the case. It may be that the trustees already have the necessary power, whether explicit or implied.

B2.1 Is it an action only the Commission can take?

Some actions can only be authorised by Order of the Commission. If the proposed action is one of these, the Commission must be involved if the action is to go ahead. The actions that only we can take, and the powers under which the actions can be taken, are given in the following table. (For further information, see E3

Section (Charities Act unless otherwise stated)  

Action

s64(2)                                

Directing that funds are treated as belonging to unidentifiable owners

s90

Vesting property in the Official Custodian (OC)

s92

Divesting property from the OC where Reverter may or does apply

s106

Authorising an ex gratia payment

s115

Authorising charity proceedings

s191

Relieving trustees etc from liability for breach of trust

s262

Amending a certificate of incorporation

s263

Dissolving an incorporated trustee body

s14 New Parishes Measure 1943

Authorising a grant of land for use as a church etc

s4(1) Open Spaces Act 1906 Authorising the transfer of property to a Local Authority
Schedule 3 Pastoral Measure 1983 Passing charity property to a new Incumbent or Parish 

 

B2.2 Is there an existing explicit power to take the action?

The trustees may already have the power to take the action they are proposing. The power might be set out in the charity's governing document or may be given by the Charities Act, the Companies Act 2006 or other legislation. Caseworkers should check the charity's governing document to see if a power exists then, if not, decide if the action is authorised by legislation. If there is any doubt about whether a power already exists caseworkers should consult a senior colleague.

B2.3 Is there an implied power to take the action?

Even where there is no explicit power to take the action they are proposing, a charity's trustees may have an implied power to take the action.

There are two particular circumstances where we might be asked to advise regarding an implied power:

  • where the trustees wish to borrow money but there is no specific power in the governing document to do this. This might come up where a charity's bank has asked for an Order to confer a power to borrow. In this case we should advise the trustees regarding the power to borrow contained in, or implied from, the Trusts of Land and Appointment of Trustees Act 1996 (see section 4 of OG 22 B1) and the Trustee Act 2000 (see section 1 of OG 86 B2). Alternatively, trustees could use a statutory power of amendment to adopt a suitable power to borrow (see OG22 B1).
  • where the trustees wish to settle or compromise a claim. In this case we should advise the trustees that they may be able to rely on an implied power in the charity's governing document or the power contained in the Trustee Act 1925 (see OG516).

Where we are satisfied that there is an implied power to take the proposed action, we should explain that we will not make an Order confirming the power. We do not make 'comfort' Orders to confirm powers that already exist.

It may be that the trustees try to insist that we give authority for the proposed action. In this case, we should explain again that we will not make an Order where there is an existing power. However, it may be appropriate to give the trustee reassurance by providing formal advice under s110 of the Act. Where we are proposing to give s110 advice caseworkers should consider taking legal advice.

B2.4 Can the trustees grant themselves an authority to take the action?

If there is no explicit or implied power available to the trustees to take the action, we should consider if the trustees can use another power to give themselves the necessary authority. It might be that the trustees can adopt a power to take the action using:

  • a power of amendment in the charity's governing document
  • the statutory power of amendment provided by s280 of the Charities Act (see OG519
  • the statutory power of amendment available to charitable companies under company law (see OG518). 

In this case, we should advise the trustees that they can rely on one of these powers to amend the governing document and refer them to the electronic form on our website to let us know when the changes have been made.

B2.5 If there is no existing power and no mechanism for the trustees to adopt a suitable power

If the trustees cannot rely on an existing power, nor adopt a suitable power using a power of amendment, we need to consider if authority can be granted by Order.

B2.6 Is it an action that the trustees can take without an Order?

We will make an Order to authorise a proposed action if:

  • there is no existing power available to the trustees (or we are uncertain as to the existence of a power and our involvement is unavoidable)
  • the trustees cannot give themselves a sufficient power
  • there is no other more efficient, effective or economic way of resolving the issue (ie by giving s110 advice or by treating a transaction as de minimis)
  • the trustees are unable to exercise a power they have to take the action (eg because it requires the consent of an unachievably high number of members) and our involvement is unavoidable
  • the trustees are legally obliged to obtain our authority (as under s117 or s124) even though they have sufficient power
  • we are satisfied that there is justification for us to make the Order, in the context of our statutory functions and objectives, and the proposed action is in the interests of the charity.

However, we can only authorise an action by Order under s105 where:

  • the action is not subject to an express prohibition in the charity's governing document

and

  • the authority will not allow the trustees to do anything to extend or alter the purposes of the charity.

If the proposal will over-ride an express prohibition or extend or alter the charity's purposes, we can only make these changes by Scheme. 

Additionally, we should not make an Order when we consider it desirable to reserve the right of appeal that is attached to the making of a Scheme. For example, where the proposal is to remove, against their will, the right of a third party to appoint a trustee to the charity.

In making an Order we can only make directions as to the manner in which any expenditure is to be borne and as to any other matters connected with or arising out of the action being authorised.

B2.7 Considering the case

Having decided that an Order is required, and suitable, to authorise the trustees' proposed action, we must decide if we are prepared to authorise the proposed action. We will only make an Order where we are satisfied that to do so is expedient in the interests of the charity. This means that we are satisfied that the decision of the trustees to take the proposed action is within the range of decisions which a reasonable body of trustees might make. It is not for us to substitute our view as to what is in the best interests of the charity for that of the trustees. It is they who decide whether it is in the best interests of the charity.

We should only authorise an action where we are satisfied that, to do so, would be consistent with our statutory functions and objectives. In making the decision, we must consider the trustees' reasons for seeking authority and decide if these are reasonable and convincing. We must also consider any human rights and equalities issues and clearly record the reasons for our decision. 

Once we have considered the case we should inform the applicant of our decision.

If we decide to refuse to make the Order we must set out our reasons why and explain our decision review process. In addition to this being subject to our decision review, a decision not to make an Order may, if the Order relates to certain sections of the Act, be appealable to the Charity Tribunal.  

Where we decide to make an Order for the charity we should inform the applicant, explain the Order making process and ask for any information we need to draft the Order (see B4). If we have all the necessary information to draft the Order we should include a draft of the Order at this stage for the trustees' consideration.

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B3 Which section of the Act should we use when making an Order?

Before drafting the Order we must decide which section of the Act we will use to make the Order. The list of model Orders in Order Procedures and Practice will help us to make that decision. The Order purpose code will insert into the Order template a recital including which section of the Act we use for a particular type of Order. Most of our Orders will be made under s105 of the Act as this gives us broad discretion to authorise any action as long as this is expedient in the interests of the charity (within certain limitations, see B2.5). A list of the most commonly used sections of the Act (and other legislation) and when we might use these is set out in Legal and Policy Framework.

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B4 Drafting an Order and sending for consideration

B4.1 Drafting the Order in Word or in an email

The process surrounding the drafting of an Order and sending this for consideration is set out in Order Procedures and Practice. We should always draft an Order using the autotext in the Word template (unless the Order is available as a CRM template) rather than copying from an existing Order, this is to ensure that we are using the most up to date text. Even where we are making the Order in the body of an email, rather than in a stand alone Word document, we should use the Word template to create the Order using autotext. Once the text has been created in Word it can be copied into the email.

B4.2 Sending for consideration

If the Order is relatively straightforward and we are satisfied that we have all the necessary information, we could draft the Order and authorise this without first sending this for consideration by the trustees. We should only do this if we are entirely satisfied that the information we have is correct otherwise this might lead to the Order having to be altered or discharged. If we need more information before making the Order we should ask the trustees for this. It might be appropriate to prepare a draft, leaving gaps for the missing information, then send this to the trustees to complete the gaps.

Even where we think that the information we have is sufficient and correct it is likely to be a good use of time to send this for consideration to ensure that the contents of the Order are correct. This might not be onerous and would usually only entail a single exchange of emails.

B4.3 Our policy on sending Orders by email

We will, in all but exceptional circumstances, serve documents by email. However, where the document is an Order, draft or otherwise, there may be a risk attached to sending this by email. This is particularly the case where the Order might be potentially contentious. The risk is that the intended recipient might not receive, or might claim not to have received, the Order. While there is no legal reason why we cannot serve Orders by email, because of the potential risk, our policy is that we will only serve Orders by email where we are satisfied that the correspondent will accept service by email. This would usually be where the earlier correspondence on a case has been conducted by email. Where we email an Order directing an action (a ‘directive Order’, see B9) we should ask for an acknowledgment of receipt, we can then be satisfied that the Order has been properly served.

Where there is any doubt about the validity of an email address, or where the circumstances of a case lead us to believe that sending the Order by email is not appropriate, we should send the Order by conventional post.

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B5 Do we need to carry out trustee checks?

Where our Order will appoint trustees we need to carry out basic checks to ensure that we do not appoint someone who is disqualified from acting as a trustee under s178 of the Act. Additionally, where the charity works with children or vulnerable adults, we must ensure that the trustees have appropriate DBS certificates (either standard or enhanced). If not, we must carry out the necessary DBS checks before we make the Order.

Full details about the background and process surrounding trustee checks is available in section 3 of Order Procedures and Practice and in section F of Finding new trustees (CC30).

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B6 Do we need to give personal and/or public notice of our intention to make an Order?

In certain circumstances we need to give personal and/or public notice of our intention to make an Order. This is where our Order will affect the rights of certain individuals in relation to the charity.

B6.1 When we must give notice

The Act requires that we must give notice before we make an Order that:

  • (under s69(1)) appoints, discharges or removes a charity trustee or trustee for a charity or removes an officer or employee. In this case, we must give notice to any trustee who was not party or privy to the decision to apply for the Order, unless the trustee cannot be found or has no known address in the UK (as required by s71). Additionally, where the Order will appoint, discharge or remove a charity trustee or trustee for a charity, section 89 requires that the Commission gives public notice of the proposal, unless the Order relates to the Official Custodian. (The Commission can, however, decide that public notice is, for any reason, not necessary, see B6.2.) 
  • removes, without consent, a charity trustee, trustee for a charity, or an officer, agent or employee of a charity unless the person cannot be found or has no known address in the UK. In this case, s89(5) requires that we give at least one month's notice to the person and invite representations. (Suggested text for an email giving this personal notice is available in section 4 of Order Procedures and Practice.) We must also give notice to any trustees who were not aware of the proposal to make the Order ('non-privy trustees').
  • (under s80(1) & s80(2)) we make of our own motion (not related to an inquiry case) to appoint or remove a charity trustee. In this case, we must give notice to each of the existing trustees unless the trustee cannot be found or has no known address in the UK. There is no requirement to give notice for a particular period of time nor to invite representations. (Suggested text for an email notifying existing trustees is available in section 4 of Order Procedures and Practice.)

B6.2 When giving notice is discretionary

S89 of the Act requires that we must give public notice before we make an Order that appoints, discharges or removes a charity trustee or trustee for a charity. The notice must ask for representations to be made within a period specified in that notice (the notice period is not specified in the Act, in practice we would usually allow one month.) The purpose of giving public notice is to ensure that any person that might be affected by the Order knows about the proposal and is able to comment.

This public notice requirement does not apply:

  • where the Order relates to the Official Custodian

or 

  • where the Order is made under s76(3)(b) of the Act (s76(3)(b) gives us the  power to appoint additional trustees, following the opening of an inquiry). (See OG117 for further information about s76.)

We do, however, have the power to decide that the publicity requirement does not apply in relation to any particular Order if we are satisfied that, for any reason, complying with the requirement is not necessary.

B6.3 Deciding if public notice is not necessary  

When deciding if the public notice requirement is not necessary we need to assess the potential risks attached to the action authorised by the Order. We will need to consider things like:

  • the likely level of public interest in the case
  • the profile of the charity
  • the risk of us being accused of lack of transparency
  • where the person is being removed by the Order, whether or not they are happy with this
  • where the appointment or removal might be contentious

In most cases it will be clear to a caseworker if any of these criteria mean that public notice might be necessary, if there is any doubt, caseworkers should ask the charity if they think public notice might be necessary for any of these reasons. Only where the caseworker is satisfied that public notice is necessary, because of the potential risks attached to a case, should we require that notice is given. We should also bear in mind that giving, or not giving, public notice may be interference with a right protected by Human Rights legislation. Because of this, caseworkers should take legal advice on this point before deciding to give public notice.  

In practice, in most cases it is unlikely that we would require public notice before we make a trustee Order.

B6.4 Considering giving public notice of draft Orders in internal conflict cases

Where we are making an Order to appoint trustees in an internal conflict case there are also other factors which we will consider in deciding whether it is not ecessary to publish the draft Order. Each Order will be considered on a case by case basis to see whether it is not necessary to publish the draft Order.

In making this decision we will take into account:

  • the purpose of publishing the draft Order
  • the risks attached to publishing or not publishing the draft Order.

The purpose of publishing the draft Order

In an internal conflict case we publish a draft Order appointing trustees to find out whether:

  • there are already trustees in place
  • the individuals to be appointed are not disqualified from being charity trustees
  • there is nothing else that would prevent the individuals from being appointed as charity trustees.

Where we are already satisfied that these points have been addressed it is likely that it will not be necessary to publish the draft Order.

The risks attached to publishing or not publishing the draft Order

We would also consider the risks associated with publishing or not publishing the draft Order to appoint trustees in an internal conflicts case. There are particular factors that are relevant to an Order of this type.

Factors that may support a decision not to publish the draft Order include:

  • an Order appointing trustees for the purpose of calling and holding an election is a temporary and protective Order
  • it is an interim measure rather than a final measure
  • often there has already been consultation with the charity’s members about the appointments to find out whether the proposed individuals can be appointed so there is less need to publish to find out this information
  • public interest is usually limited – the main interested parties are the members of the charity
  • if we make an Order by mistake then we can revoke it
  • publishing a draft Order can have the effect of escalating a dispute
  • there is risk in leaving a charity without trustees for a long period whilst a draft Order is published.

Factors that may support a decision to publish include:

  • the Order is open to challenge in the charity tribunal
  • the Commission may appear less transparent if the draft Order is not published
  • there may be factors of which the Commission is not aware that would come out in representations made in response to publication

Whatever our decision, we should clearly record this, and our reasons for making the decision, on the case file.

B6.5 Wording of the notice

Where we decide that public notice is necessary we should provide the charity with model wording to insert into notices produced by the trustees. We will provide this wording by email, we do not supply complete notices for the trustees to print off. The model wording for the public notice, and for the declaration that notice has taken place, is available in section 4 of Order Procedures and Practice.

B6.6 Deciding how long the notice period should be

Personal notices

  • Where we make an Order to remove an individual, s89(5) requires that we must always give at least one month's notice to the person and to invite representations to be made within the notice period.
  • Where we make an Order under s69 to appoint or remove an individual we must notify non-privy trustees. The notice period is not specified, nor are we required to actively invite representations. For consistency, we will usually expect the notice period for Orders under s69 to be one month. We may decide to reduce this period if there is clearly no reason to have a full month's notice.
  • Before we make an Order under s80(1) or 80(2) we must give notice of our intention to do so to all of the charity’s trustees. There is no requirement to give notice for a particular period of time nor to invite representations.

Public notice

  • Where we decide to give public notice under s89 the notice period is not specified. Once again, for consistency, we would usually expect the notice period to be one month. However, we might decide to extend the notice period to up to six weeks if the public notice period covers a date that includes a holiday period or religious festival, or if the notices go up in a park in the winter when there are potentially fewer visitors. Similarly, we may decide to reduce the public notice period if there is clearly no reason to have a full month's notice.

B6.7 Where to display the notice

Where we decide that public notice is necessary we should agree with the trustees where to display the notices:

  • we will usually ask for notices to be displayed on notice boards close to the charity's property and/or published in an e-newsletter or magazine
  • if the charity is a membership charity, we might ask that the notice is circulated to members
  • we may decide that publication in a national newspaper is necessary, we should only do this in exceptional circumstances due to the costs attached.

However, having considered the particular case, we may decide that publication on the charity's website (and ours) is sufficient without the need for the posting of any additional notices.

B6.8 Posting the draft Order on our website

Where we decide that public notice is necessary we should also upload a copy of the draft Order onto our website. Guidance on how to do this is available in annex C of Order Procedures and Practice.

When uploading the Order we should try to do this on the same date that the trustees publish the notices locally. This is to ensure that the agreed notice period begins and ends at the same time. If notices are published on our website and locally on different dates the notice period will not end until the later of the two dates. For example, if we agree a notice period of one month and upload the Order onto our website on 1 January, but the trustees do not display the notices locally until 10 January, the notice period will start on 1 January but will not end until 10 February.

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B7 Providing copies of draft Orders

The notice directs people to view the Order on our website but also gives the phone number for First Contact in case a person cannot access the internet. If we are asked to provide a copy of the draft Order we should first see if the requester has an email address that could be used (this may be the address of a friend or relative). Only if there is no practical way of sending an electronic copy should we send a hard copy in the post.

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B8 Dealing with representations

Where we are required to give personal notice, or where we decide to require public notice, before making an Order, we must invite representations. Section 89(6) states that we must take into account any representations made within the period specified in the notice. Having done this we may decide to proceed with the proposals (to make the Order), with or without any modifications, without the need for further notice. We can also decide not to make the Order at all.

B8.1 Procedure for dealing with representations

Representations are dealt with by the Litigation & Review Team (LRT) in accordance with the procedures set out in the LRT Desk Guidance on handling representations. Broadly, the guidance states that, where a caseworker receives representations, they should:

  • immediately inform LRT that a review case will shortly be passed to them, and specify the date on which the representation period is due to end
  • open a new CRM case, logging each representation received
  • log the names and addresses of objectors to facilitate a mail merge (a template is available to do this)
  • acknowledge receipt of the representations using the standard letter provided
  • prepare a background note giving details of the case. (The LRT guidance sets out the information that should be included in the background note.) 

LRT will manage the representation consideration process. If we decide to make the Order, with or without modifications, the reviewer will refer this back to the original caseworker to process the making of the Order. Once the Order is made, this will be referred back to LRT to issue and to respond to the people who made representations.

B8.2 Considering representations

The person appointed to review the representations must be careful to form an objective view of the case in support of the Order as well as the representations against it. When considering representations, we must ensure that the representation is relevant to the proposed Order and received within the time limit set out in the notice. (Although we can decide to take into account representations received after the deadline, and before we make the Order, if the information contained might affect the making of the Order.)

A representation does not need to be based on a point of law or be supported by evidence or argument.

Generally we should consider the representations based on:

  • the interests of the charity
  • the need to exercise our jurisdiction in a valid way, taking into account relevant information and ignoring irrelevant information
  • the technical sufficiency of the Order

When considering representations we should review the case with an open mind. 

B8.3 Our action after considering representations

Once we have considered the representations, and discussed any proposed modifications with the trustees, if appropriate, we must decide how to proceed. We might decide to:

  • reject the representations and make the Order as drafted. In this case the reviewer must write up a decision document setting out the reasons for rejecting the representations. This will be issued by LRT
  • accept the suggestions put forward as representations and amend the Order accordingly. In this case the reviewer must decide if a further period of public notice is needed. This would usually be where the Order will now appoint or remove a different person. If there is any doubt about whether or not additional public notice is required, the reviewer should consult a Commission lawyer
  • terminate the Order making process. In this case the reviewer must set out the reasons for making this decision and refer the case back to the originating caseworking division to take the case forward from there

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B9 Authorising an Order

Once we have:

  • agreed the terms of the Order
  • carried out trustee and DBS checks (if required)
  • given the required personal notices
  • given public notice (if necessary) and received the completed public notice declaration from the trustees (and the notice period has passed) 

and

  • considered any representations we received

if we are satisfied that it is appropriate to make the Order (with or without modifications) we should authorise the Order to bring this into force.

The Order is made when it is signed and dated by the Authorised Officer. The Order is also given a unique serial number from the authorised document ledger for identification purposes. If we make an Order by email, it can be signed by adding the name of the Authorised Officer to the Order. An Order made by email does not require an actual signature on a  hard copy of an Order to authorise it, typing the name of the Authorised Officer has the same legal effect. However, we have decided that, as a matter of policy, where we are making an Order directing an action by a charity, an individual or an institution (a ‘directive Order’) we will produce a hard copy Order which is signed by the appropriate Authorised Officer.

By ‘directive Order’ we mean any Order made:

  • as part of a statutory inquiry,
  • under s52 of the Charities Act, or
  • under s85 of the Charities Act.

Even where we authorise an Order by physically signing it, we will not routinely send this out as a hard copy. If the case has been conducted by email we will save the Order as a pdf and send this by email (see B4.3).

The full process for authorising Orders, including how these are stored in CeRIS, is set out in section 6 of Order Procedures and Practice. 

When we make an Order under s76 we are required (by s86 of the Act) to prepare a statement of reasons, setting out why we made the Order. Section 86 also requires that we must send a copy of the statement of reasons, along with a copy of the Order, to each of the charity's trustees. (An example statement of reasons is set out in Model Letters and Orders.)

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B10 Publicity after we make an Order

We are not required by law to give public notice after an Order is made. However, our policy is that, if we have given public notice before making the Order, and we received representations as a result of this, we will ask for public notice to be given after we make the Order. Wording for the notice can be adapted from the wording we use to give public notice after we make a Scheme, this wording can be found at point 12.4 of Scheme Procedures and Practice. We should ask that the trustees make the Order available locally for at least one month (and specify this in the notice). Where we decide to give public notice after making an Order we will also post a copy of the Order on our website for three months from the date it is made.

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B11 Providing copies of authorised Orders

If we are asked to provide a copy of a paper Order, we should send a certified copy of the Order. To certify a copy of a paper Order, an Authorised Officer should write 'I certify this is a true copy of the original' then sign this.

If we are asked to provide a copy of an Order made in an email we should simply forward the original email as an attachment, having removed the email address of the charity's correspondent. In our forwarding message we must state 'I certify this is a true copy of the email sent on [DATE]' and add the name of the Authorised Officer certifying this.

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B12 Discharging Orders

We may come across a case where we have made an Order in error, either because we have been deliberately misled into making the Order or because we have made the Order by mistake. In this case we will usually discharge the Order and take whatever additional action is necessary.         

B12.1 Where we have been misled into making the Order

Where we have made an Order as a result of misinformation given to us we can discharge this Order by making a second Order within 12 months of the date of the original Order. If more than 12 months have passed, the Order can only be discharged by Scheme. In either case, if we want to save any acts carried out under the authority of the original Order, we must specify this in the Order (or Scheme) discharging the original Order. The person who provided the misinformation could be subject to action under s60 of the Act. Text for a model Order to discharge an earlier Order is available in Order Procedures and Practice.  

B12.2 Where the mistake in making the Order was ours

Similarly, where we have made an Order by mistake, and the mistake was ours, we can discharge the Order by making another Order (unless more than 12 months have passed, in which case a Scheme is necessary.) In this case, the trustees who relied on the authority given by the Order are protected from any potential breach of trust which might be seen to arise as a result of the Order being discharged. Where appropriate, we can make 'savings or other transitional provisions' in the Order under s337(4). We should also consider whether trustees may challenge any action by reference to any rights they may have under Article 1 of the First Protocol of the Human Rights Act 1988 (see OG71 C3).

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Legal and Policy framework

E1 Legal key points

  • The Charities Act gives the Commission power to make Orders to authorise a charity's trustees to carry out specific actions. Certain other legislation also gives us Order making powers.
  • When the Order relates to the rights of an individual in relation to a charity there are requirements to give personal and/or public notice.
  • In deciding whether or not to make an Order we must consider any impact this may have in the context of human rights and equalities legislation.
  • Where public notice is given we must consider any representations made following this and, having done so, may decide to make the Order, with or without modifications or may decide not to make the Order.
  • If we are appointing a trustee by Order we must carry out the necessary trustee checks before making the Order. This is to ensure that the person is not disqualified from being a trustee under the Charities Act or, where the charity works with vulnerable beneficiaries, under protective legislation.
  • If we make an Order in error, either because we were misinformed, or if we made a mistake when making the Order, we can make a second Order discharging this. 

E2 Policy key points

  • We will only make an Order where a charity's trustees have no other suitable power to take the action they propose.
  • We do not make comfort Orders where trustees have an existing power to take the action they require.
  • e will authorise Orders electronically. This can be within the body of an email where appropriate. We will only authorise Orders by physically signing them where the Order directs an action by a charity, an individual or an institution (a ‘directive Order’, see E6).
  • Where we have given public notice of our intention to make an Order, and received representations, we will give additional public notice once the Order is made.  

E3 The Commission's power to make Orders

The Commission is given the power to make Orders primarily by various sections of the Charities Act. In addition to this there are other pieces of legislation that give a power to the Commission to make Orders.

The sections of the Act, and other relevant legislation, that we most commonly use when making Orders are set out below, along with a brief description of why we might use the powers provided by these sections. 

E3.1 Powers provided by the Charities Act

Section 64(2)

Section 64(2) gives the Commission the power to make an Order to direct that funds should be treated (without advertisement or inquiry) as belonging to unidentifiable donors where, in our view:

  • the cost of attempting to trace donors would be disproportionate to the amounts likely to be returned

or

  • in view of the circumstances (eg the nature of the gifts or the passage of time) it would be unreasonable for donors to expect the property to be returned.

Section 69

We usually rely on the power given by s69 to make Schemes for charities. However, we can also make Orders under s69, we do this to:

  • appoint, discharge or remove a charity trustee or trustee for a charity
  • remove an officer or employee of a charity
  • vest or transfer property (either in the names of individuals or, where the power is used in conjunction with the power given by s90, in the name of the Official Custodian)

Section 76

Section 76 provides powers that we would usually use as part of investigation action. (Full details about using s76 as part of an Investigations case are set out in OG117). However, as well as being used by IME, the powers provided by s76 to appoint a trustee 'of our own motion' can be used outside of an Investigations case. Section 80(2) allows us to appoint a trustee by Order where:

  • we have removed a trustee under s76
  • there are no trustees or there are too few serving trustees to apply to us to appoint additional trustees
  • there is a single trustee (not a corporate trustee) and we are of the opinion that it is necessary to increase the number of trustees
  • we consider it necessary to appoint an additional trustee because one of the serving trustees either cannot be found or is outside of England and Wales.

Where we make an Order under s76 we are required, by s86, to prepare a statement of reasons setting out why we made the Order. This statement must be sent to each of the charity's trustees along with a copy of the Order itself. An example of a statement of reasons is set out in Model Letters and Orders.

Section 90

Section 90 powers are used in conjunction with s69 powers to vest charity property in the name of the Official Custodian. Section 90 also provides power to discharge the OC from the trusteeship of any property already vested in the OC. Further information about vesting is available in our publication The Official Custodian for Charities' Land Holding Service (CC13).

Section 92

Section 92 gives the power to discharge the OC from trusteeship of land where that land is, or may be, subject to Reverter (see OG27). 

Section 105

Section 105 provides broad powers to make an Order to authorise a charity's trustees to carry out an action that we consider is expedient in the interests of the charity. A s105 Order cannot authorise an action that will override an express prohibition in a charity's governing document or change the charity's purposes. We might make a s105 Order to authorise the payment of a trustee or to authorise trustees to adopt a total return approach to investments.

Section 106

Section 106 provides a power for us to authorise a charity's trustees to make an ex gratia payment (see CC7).

Section 115

We use the power given by s115 to authorise a charity's trustees to enter into charity proceedings. A charity cannot use its funds to pay for court proceedings (which are defined as 'charity proceedings') without specific authority from the Commission.

Section 117

Section 117 relates to the disposal of charity land. We can make an Order under s117 to authorise the disposal of land where the charity's trustees cannot comply with the other provisions of s117. We may make an Order jointly under s105 & s117 where there is a connected person issue or there is doubt about the power of the trustees to sell (see OG548).

Section 124

Section 124 relates to the power to mortgage charity land. We can make an Order under s124(1) where a charity's trustees cannot comply with the other sections of s124 (see OG22).

Section 146(1)

Section 146(1) gives us the power to make an Order requiring the audit of a charity’s accounts, where an audit is required but has not been carried out or where an audit is not required but it appears to the Commission that an audit is desirable (see OG15 for more information about charity accounts).

Section 147(2)

Section 147(2) gives the Commission the power to appoint an auditor to investigate the accounts of a charitable company (see OG15).

Section 191

Section 191 can be used to make an Order giving full or partial relief to an individual from his or her personal liability for a breach of trust or duty (see OG98).

Section 251

Section 251 gives us the power to grant a certificate to incorporate a trustee body as a body corporate. Because this certificate can include conditions and directions, and can only be amended by Order, we consider that this certificate is, in effect, an Order of the Commission (see OG50).

Section 262

Section 262 gives us the power to amend a certificate of incorporation by Order, made under s251, either on the application of the incorporated body or of our own motion (see OG50).

Section 263

We can use the power given by s263 to make an Order to dissolve a body incorporated under s251 where the body does not operate, has ceased to exist, is no longer a charity or has fulfilled its purposes (see OG50).

Section 337

Section 337 Orders can be made to discharge an Order made in error or made under a misapprehension (s337(4)) or to revoke or vary an earlier Order (s337(6)) (see E7).   

E3.2 Powers provided by other legislation

New Parishes Measure 1943

Section 14 of the New Parishes Measure 1943 allows charity trustees to gift or sell (at or below full market value) property to the Church Commissioners for uses associated with the provision of church facilities, but only with the sanction of an Order of the Commission. 

Open Spaces Act 1906

Section 4(1) of the Open Spaces Act 1906 allows the trustees of an open space to transfer the property to a local authority, under certain circumstances, and only with the sanction of an Order of the Commission.

Pastoral Measure 1983

Paragraph 11 of Schedule 3 of the Pastoral Measure 1983 gives a power to pass charitable property to a new incumbent or parish where a benefice or parish has been dissolved by pastoral scheme. However, this can only be done with the authority of an Order of the Commission.

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E4 Publicity requirements for Orders relating to trustees and other individuals

E4.1 Notifying those to be removed from office by Order without their consent

Section 89(5) of the Act provides that any charity trustee, trustee for a charity, officer, agent or employee who is to be removed from office by Order, without consent, must be given at least one month's notice of the proposal to make the Order and must be invited to make representations. This applies unless the trustee:

  • cannot be found

or

  • has no known address in the UK

An Order vesting property in the Official Custodian is not an Order to remove trustees. The charity trustees will continue to be the charity trustees. Even where there is a holding trustee, the Order will merely vest property previously held by that trustee in the Official Custodian, it will not be a removal of the trustee as such. However, a holding trustee replaced by such a vesting Order is likely to be a person who is or may be affected and so will have a right to appeal to the Tribunal. We should therefore take into account the views of the holding trustee before making such an Order.

E4.2 Notifying existing trustees where we make an Order to appoint trustees

When we make an Order to appoint trustees, under the power given by s76 of the Act, we are required, by s82 of the Act, to notify each of the existing trustees. This applies unless the action is taken under s76(1) or if the trustee cannot be found or has no known address in the UK. When we make an Order under s76 we are also required (by s86 of the Act) to prepare a statement of reasons, setting out why we made the Order. Section 86 also requires that we must prepare and send a copy of the statement of reasons, along with a copy of the Order, to each of the charity's trustees. (An example statement of reasons is set out in Model Letters and Orders.)

E4.3 Giving public notice when making an Order relating to trustees and other individuals

Section 89 of the Act states that we may not make an Order to appoint, discharge or remove a charity trustee or trustee for a charity without first giving public notice and asking for representations to be made within a period specified in that notice. This applies in all cases except where the Order relates to the Official Custodian or where the Order is made under s76(3)(5) of the Act. (Section 76(3)(5) gives us the power to appoint additional trustees, following the opening of an inquiry, as we see necessary for the proper administration of a charity.)

However, section 89(4) of the Act gives us discretion to decide that the publicity requirement does not apply in relation to any particular Order if we are satisfied that, for any reason, this is not necessary (see B6.)

E4.4 Considering representations

Where we are required to give personal notice, or where we decide to give public notice, before making an Order, we must invite representations. Section 89(6) states that we must take into account any representations made within the period specified in the notice. Having done this we may decide to proceed with the proposals (to make the Order), with or without any modifications, without the need for further notice. We may also decide not to make the Order.

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E5 Trustee checks when appointing trustees by Order

Where we are proposing to make an Order to appoint trustees we are required to carry out the appropriate trustee checks before we make the Order. This is to ensure that the trustees are not disqualified from being trustee (under s178 of the Charities Act). And, where the charity works with children or vulnerable adults, to ensure that the trustees are not disqualified from acting (or unsuitable to act) with this kind of charity, by carrying out DBS checks (in accordance with the provisions of the Safeguarding Vulnerable Groups Act 2006) (see OG510-2).

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E6 Physically signing 'directive' Orders

ur policy is that we will authorise all Orders electronically unless the Order is one that directs an action by a charity, an individual or an institution (a ‘directive Order’). In this case we will authorise the Order by adding the date and an Authorised Officer physically signing it.

By ‘directive Order’, we mean any Order made under the following sections of the Charities Act:

  • s.52 – information gathering
  • s.76(3)(a) – suspend a trustee, charity trustee, officer, agent or employee
  • s.76(3)(b) – appointment of additional trustees
  • s.76(3)(c) – vesting/transferring property into the name of OC (where this is part of a statutory inquiry case)
  • s.76(3)(d) – Order not to part with property
  • s.76(3)(e) – Order debtor not to make payment
  • s.76(3)(f) – Order to restrict transactions
  • s.76(3)(g) – appoint an interim manager
  • s.79(2)(a) – removal of a trustee, charity trustee, officer, agent or employee
  • s.79(2)(b) – establish a Scheme for the administration of a charity
  • s.80(1) – remove trustee for statutory reasons
  • s.83 – suspending or removing membership
  • s.84 – direction for protection of charity
  • s.85 – direct application of charity property

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E7 Terminating Orders

E7.1 Where the Order was incorrectly made

Section 337(4) of the Act gives us the power to wholly or partly discharge an Order (other than a s263 Order dissolving a charity) if we are satisfied that the Order was made:

  • by mistake
  • on misrepresentation

or

  • not in conformity with the Act.

The Order can be discharged without application from or reference to the charity's trustees.

We can only discharge an Order under this section within twelve months of the date of the Order. Otherwise a Scheme will be required (see B12).  

E7.2 Where the power given by the Order is no longer needed 

Where there is no longer any need for the power provided by an Order we can make a second Order revoking or varying the Order. The power to do this is provided by s337(6) of the Act.

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Q&A

F1 What is an Order of the Commission?

An Order is an authorised document of the Commission. We can make an Order for a charity under one of the powers given by the Charities Act or by certain other legislation (see E3).

F2 When might an Order be necessary?

Where a charity's trustees would like to follow a particular course of action, but there is no existing authority to do so, authority could, in some circumstances, be provided by Order. By 'existing authority' we mean a power in a charity's governing document or a power provided by legislation either explicit or implied.

See Legal and Policy Framework for more details about the type of authority we can provide by Order.

F3 What are the limitations of an Order?

A s105 Order cannot authorise an action that over-rides an express prohibition in the charity's governing document or that will enable the trustees to do anything to extend or alter the purposes of a charity.

Additionally, we should not make an Order where we consider that it would be appropriate to allow a right of appeal. In this case we should consider making a Scheme rather than an Order (see B2.5). 

F4 When will we make an Order?

We will only make an Order where a charity's trustees have no suitable power, either explicit or implied, to take the course of action they are proposing to take. If there is no existing power, trustees should look to adopt a suitable power using a power of amendment in the charity's governing document or the statutory power of amendment. It is only where there is no existing power and where a suitable power of amendment is not available that we will consider making an Order (see B2).

F5 Do we need to give notice before we make an Order?

Unlike when we make a Scheme, in most cases, there is no requirement to give public notice before we make an Order. However, an Order that will appoint, discharge or remove a charity trustee or trustee for a charity requires us to give one month's public notice before making the Order. (We can, however, decide that publicity is not required, if we are satisfied that, for any reason, this is not necessary.) Where we are making an Order that affects the rights of certain individuals in relation to a charity we may need to give personal notice of our intention (see B6).  

F6 Can we give a power of amendment by Order?

We do not make Orders granting trustees a power to amend their charity's governing document. Trustees of an unincorporated charity can rely on the statutory power of amendment given by s280 of the Charities Act to amend the administrative provisions of a charity's governing document. Trustees of charitable companies have similar powers under company law. If we were to give a power of amendment by Order, this power of amendment would provide the same power as this legislation, and no more. We will not make an Order where a power already exists.

F7 Will we make a 'comfort' Order for a charity?

We do not make Orders where we are satisfied that a charity has an existing power, either explicit or implied, to take the action they require. This is particularly an issue where banks might question the power of a charity to borrow money and ask for an Order to confirm this power (see B2.3)

F8 Will we make a 'blanket' Order giving authority for multiple transactions?

Yes, in certain circumstances. It may be apparent that a charity is intending to carry out a number of similar actions at different times in the future that will all require our consent. For example, where there is a planned programme of disposals to connected persons. In this case, it might be more convenient for the charity, and a better use of our resources, to make a single Order giving an ongoing authority that can be relied on as and when necessary. This Order must contain safeguards to ensure that the authority cannot be used improperly by specifying conditions that must be met every time the relevant power is exercised. An example of this kind of Order can be found in the Model text section. 

F9 Can a power granted by Order be revoked?

Yes, we can make a second Order that brings to an end a power given by Order (often relating to an Order authorising borrowing and replacement of capital). Alternatively, where we have made an Order by mistake, on misrepresentation, or not in conformity with the Charities Act, we can make a further Order discharging this Order (as long as this is done within 12 months of the date of the original Order).

F10 Will we physically sign Orders?

es, in certain circumstances. While in most cases we will authorise an Order by typing the Authorised Officer’s name into the Order, where we are making an Order directing an action by a charity, an individual or an institution (a ‘directive Order’) we have decided that, as a matter of policy, we will produce a hard copy Order which is signed by the appropriate Authorised Officer.

By ‘directive Order’ we mean any Order made:

  • as part of a statutory inquiry,
  • under s52 of the Charities Act, or
  • under s85 of the Charities Act

(see B9).

F11 Can we serve an Order by email?

Yes, where we are satisfied that the correspondent will accept service by email. This would usually be where the case has been conducted by email. (This applies equally whether the Order is made electronically or made in hard copy and signed, in this case we can save the Order as a pdf and attach it to an email.) When sending a directive Order (see B9) by email we should ask for an acknowledgment of receipt.

If there is any indication that the correspondent will not accept service by email, or if the circumstances of the case suggest that emailing the Order might not be appropriate, we should send the Order in the post (see B4.3).

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Model text

G1 Model text for emails, notices, Order text, etc

Is available in Order Procedures and Practice.

 

G2 Example of a 'blanket' Order

 

ORDER OF

THE CHARITY COMMISSION FOR ENGLAND AND WALES

to authorise the disposal of charity land under the power given in sections 105 and 117 of the Charities Act 2011

dated the

##

for the charity known as

##

DEFINITIONS

In this Order:

‘the charity’ means ##

‘the Commission’ means the Charity Commission for England and Wales

‘connected persons’ means connected persons (as defined in section 118 of the Charities Act 2011)

‘the properties’ means the properties described in the first schedule to this Order and any other properties acquired from time to time by the charity for the purposes of providing reasonable residential accommodation for the tenants

‘the tenants’ means the people described in the second schedule to this Order

‘the trustees’ means the trustees of the charity

ORDER

1. Being satisfied that it is expedient in the interests of the charity that it should do so, the Commission authorises the trustees to grant leases of the properties to the tenants even though the tenants may be connected persons.

2. The trustees may only rely on the authority provided by this Order if they have complied with the conditions set out in the Third Schedule to this Order.

FIRST SCHEDULE: THE PROPERTIES

Land 

HM Land Registry title number

SECOND SCHEDULE: THE TENANTS

Any officers, agents or employees of the charity (not being trustees) who by reason of their employment or engagement by the charity properly and reasonably require the provision of housing by the charity to facilitate the proper performance of their duties

THIRD SCHEDULE: THE CONDITIONS

Part 1

For the authority conferred by this Order to be effective the following conditions must first be satisfied:

1. In respect of each lease granted the charity’s trustees, or the person(s) to whom authority has been delegated for this purpose, must:

1.1. have acted reasonably (i.e. their decision is within the range of decisions which a reasonable body of trustees could make);

1.2. have acted in good faith (for example ensuring that all conflicts of interest have been properly managed);

1.3. have taken appropriate legal and other professional advice, including such advice as is properly required to satisfy themselves that the terms and effect of each lease are reasonable and in the best interests of the charity;

1.4. have given proper consideration to all relevant factors and not taken irrelevant or improper considerations into account; and

1.5. be satisfied that the granting of the lease will further the objects of the charity and otherwise be in the best interests of the charity.

2. There are no restrictions that would prevent the charity from granting a lease of the property concerned.

3. The market rent of any property leased under the authority provided by this Order is assessed not less than once every two years by a person who is reasonably believed by the trustees to have the requisite ability and practical experience to provide them with competent advice.

4. The charity’s standard form of tenancy or licence agreement is used, subject to minor alterations required in each disposal or in the case of property which is leased or licensed to the charity, any requirements of the head lease or licence.

5. Any lease granted contains provisions ensuring that the lease will terminate within a reasonable period (not being more than six weeks) upon the tenant’s employment or contract with the charity ending.

Part 2

1. The authority conferred by this Order is effective for a period of 10 years from the date of the Order.

2. Before undertaking any act under the authority conferred by this Order the trustees, or the person(s) to whom authority has been delegated for this purpose, must certify that in relation to the proposed act all the applicable conditions in this Schedule have been met. 

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G3 Example statement of reasons

Statement of the Commission’s reasons in accordance with section 86(1) of the Charities Act 2011 (‘the Act’)

Grounds for appointing the currently acting de-facto trustees as trustees in respect of the property and affairs of the charity known as ############## (‘the charity’) until the end of the next AGM in accordance with section 80(2)(b) of the Act.

The grounds for the appointment are that the Charity Commission (‘the Commission’) needs to be satisfied that:

There are no charity trustees, or where by reason of vacancies in their number or the absence or incapacity of any of their number the charity cannot apply for the appointment.

The Commission is satisfied this ground applies.

The reasons in support of this ground are:

1.         The governing document of the charity is a Memorandum and Articles of Association incorporated 1 January 2000. In accordance with Article 3, the election of trustees is to be made at the Annual General Meeting (AGM), with one third of the trustees retiring by rotation at each AGM. The quorum for an AGM is 10 members (Article 2.2).

2.         The Commission has been informed that for at least the last three years the AGMs held did not secure the attendance of at least 10 members and therefore the quorum provisions were not met. As one third of the trustees must retire at each AGM, this raises questions about whether there are any validly appointed trustees of the charity. 

3.         In practice, individuals who were elected at the AGMs (albeit that they were not elected by a quorum of members) have been administering and managing the charity as de-facto trustees.

4.         It appears to the Commission that there is sufficient doubt about whether the charity does have any validly appointed trustees, for the reasons explained above. We have therefore agreed to appoint trustees by making an Order under section 80(2)(b) of the Act. We will appoint those individuals who were elected at the AGMs and have been acting as de-facto trustees.

Risk & Proportionality

5.   Unless the Commission appoints trustees, there will continue to be significant doubt about whether the charity has any validly appointed trustees able to administer and manage it. The charity has a significant income and therefore it is proportionate for the Commission to use its powers to appoint trustees.

6.         It has been confirmed by the charity that it will be possible for new members to be appointed so a quorum can be achieved at the next AGM. It is therefore proportionate for us to appoint trustees to act until the termination of that AGM, at which meeting a quorum of members can validly appoint trustees in line with the provisions of the governing document. 

7.         The Commission is satisfied on the basis of checks undertaken and declarations signed by the individuals named in the Order that they are not disqualified from acting as a trustee under section 178 of the Act. The charity also holds current CRB check certificates for all the individuals.

Human Rights

8.         The Commission has considered its duties under the Human Rights Act 1998 and is satisfied that its proposed action is proportionate and in pursuit of the legitimate aim of the furtherance of the Commission’s objectives as set out in section 15 of the Act.  These objectives include 'encouraging and facilitating the better administration of charities'.

Equality Legislation

9.         The Commission has considered its duties under equality legislation on the grounds of race, sex, religion and disability and we are satisfied that our decision to make an Order under s80(2) of the Act complies with our general statutory duties.

 

Dated

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