Can a board meeting be held without the company secretary being present or invited to attend?

How often do trustees of a charity have to meet?

Empowering Members to Elect their Board

An incorporated charity with members:

a) Each year a third of the board retires, two thirds continue and because there are vacancies, and no one opposes, those who retired are reappointed. The board does not change. This might discourage new trustees.

Is there a better way? Is there a way that would only appoint trustees who were elected by a majority ballot of members and make sure that you always had at least 3 trustees? If so what might the wording be?

b) Article 33(2), below. What might the particulars comprise in “stating the Particulars”

c) Article 38, below. Could this mean that a director (unpopular with the members) could retire at an AGM, avoiding not being elected by the members, only to be reappointed by the board the next day?

===== Extract from Mems and Arts===========

30. At the first annual general meeting all the trustees shall retire from office, and at every subsequent annual general meeting one third of the trustees who are subject to retirement by rotation or, if their number is not a three or a multiple of three, the number nearest to one third shall retire from office: but, if there is only one trustee who is subject to retirement by rotation he shall retire.

31. Subject to the provisions of the Act, the trustees to retire by rotation shall be those who have been longest in office since their last appointment or reappointment, but as between persons who became or were last reappointed trustees on the same day those to retire shall ( unless they otherwise agree among themselves ) be determined by lot.

32. If the Charity at the meeting at which a trustee retires by rotation, does not fill the vacancy the retiring trustee shall, if willing to act, be deemed to have been reappointed unless at the meeting it is resolved not to fill the vacancy or unless a resolution for the reappointment of the trustee is put to the meeting and lost.

33. No person other than a trustee retiring by rotation shall be appointed or reappointed a trustee at any general meeting unless: (1) he is recommended by the trustees; or (2) not less than fourteen nor more than thirty-five clear days before the date appointed for the meeting, notice executed by a member qualified to vote at the meeting has been given to the Charity of the intention to propose that person for appointment or reappointment stating the particulars which would, if he were so appointed or reappointed, be required to be included in the Charity’s register of trustees together with a notice executed by that person of his willingness to be appointed or reappointed.

34. No person may be appointed as a trustee (1) unless he has attained the age of 18 years; or (2) in circumstances such that, had he already been a trustee, he would have been disqualified from acting under the provisions of Article 38.

35. Not less than seven or more than twenty-eight clear days before the date appointed for holding a general meeting notice shall be given to all persons who are entitled to receive notice of the meeting of any person ( other than a trustee retiring by rotation at the meeting ) who is recommended by the trustees for appointment or reappointment as a trustee at the meeting or in respect of whom notice has been duly given to the Charity of the intention to propose him at the meeting for appointment or reappointment as a trustee. The notice shall give the particulars of that person which would, if he were so appointed or reappointed, be required to be included in the Charity’s register of trustees.

36. Subject as aforesaid, the Charity may by ordinary resolution appoint a person who is willing to act to be a trustee either to fill a vacancy or as an additional trustee and may also determine the rotation in which any additional trustees are to retire.

37. The trustees may appoint a person who is willing to act to be a trustee either to fill a vacancy or as an additional trustee provided that the appointment does not cause the number of trustees to exceed any number fixed by or in accordance with the Articles as the maximum number of any trustees. A trustee so appointed shall hold office only until the next following annual general meeting and shall not be taken into account in determining the trustees who are to retire by rotation at the meeting. If not reappointed at such annual general meeting, he shall vacate office at the conclusion thereof.

38. Subject as aforesaid, a trustee who retires at an annual general meeting may, if willing to act, be reappointed.

Below are details of a consortium that wants to clarify its liabilities.

Background

*It was formed 5 years ago and has just over 10 member organisations. It has a name, logo, branding and website.

* The members meet monthly. They have developed protocols, membership, procedures for electing officers, running sub-groups which in one case has its own funding streams.

* The consortium bids for work and then delivers work, sometimes branded with the consortium's brand, sometimes with the individual member's own brand, sometimes with a mixture of both. They have protocols for bidding, planning and delivering and reporting on work.

* The consortium uses funding (as specified in the bid) to pay for staff to service the consortium but who are employed through one of the members.

* Bids are submitted in the consortium's name. There is a lead organisation and a statement to sub-contract to other members. Each member who delivers work is issued a commissioning letter and a sub-contract to deliver. The member is responsible for insurance and managing the liability of the services it delivers. Work sub-contracted to members can include events open to the VCS and public sector and branded with the consortium's logo, name.

* Members understand that if they do not deliver the work they are sub-contracted to deliver they will not receive payment.

* Members accept that they are wholly liable for work they are sub-contracted to deliver.

Questions

* What is the legal identity of the consortium? Is it a network, an informal partnership, an unincorporated organisation or something else?

*To what extent are members liable for other members actions, as opposed to the lead body being liable for its sub-contractor's actions? This subdivides into:

**When the member is sub-contracted to deliver work but does not deliver at all/to schedule/to specification/to an agree standard

**When a member delivers work they have been sub-contracted to carry out on behalf of the consortium and to which a third party takes offence and wants to complain - do members have control over whether the third party should be directed to complain to the sub-contractor or the consortium?

**How liable are other members when one member speaks on behalf of the consortium ?

**Can protocols/agreements be put in place to cover the liability of the 2 previous questions?

*Bearing in mind the various agreements and contracts used to cover liabilities when sub-contracting work and cover of financial liabilities, what are the other possible liabilities consortium members might incur and how likely is it that they will occur? (I think this is an enquiry along the lines of a nature, level and likelihood of risk analysis). Sub questions to this are:

**What are the implications of liabilities regarding its current legal structure?

**Can these liabilities be covered effectively through protocols/insurances?

In a recent reply (“How can these directors avoid personal liability?”, 11 July), you said:

“No-one who is involved in the running of an organisation can absolutely ensure that they will never suffer any loss as a result of that involvement.”

This led our trustees to a discussion on the potential for personal liabilities to impact negatively on board recruitment; and from there to the issue of risk management generally. Are you aware of any general resources available regarding techniques for managing risk in the not-for-profit sector?

We are a charitable company running a national grant funded project for past 3 years which has seen a network of 'partners' form. All of these are independent non-profit organisations, located throughout England and offer a diverse range of products, services and inherent expertise.

Over time, the potential within this network has become evident and opportunities to trade in the marketplace as a 'network' are rapidly emerging - such as collective bargaining, becoming a sales/distribution channel for suppliers to get to market, collective 'bidding' for grants and other commissioned work, and trading with others in the network.

However, there are a number of challenges to resolve in order to realise these opportunities and we have identified a need for agreement on the 'rules of engagement'. Some of the visible issues are:- who serves as the 'accountable body'; can any member 'speak on behalf of the network' and broker 'deals' for the network; how do individual members reconcile their own charitable objectives/ethics/etc.; can individuals opt out of specific opportunities where they perceive a 'clash'; how would financial relationships work.

Can you advise on the types of 'governance' model that might be applicable to this or suggest a template 'partnership agreement' or should the 'network' consider forming a separate legal entity? I understand from a colleague that there was a post on ExpertsOnline previously offering free legal service to charities from a solicitor - is that still available?

Hello Charlie

I have a question concerning a small charitable pre-school (unincorporated) who have run into difficulties. They have a new board of trustees replacing the last one which was found to be involved in a series of 'incidents' of mismanagement of funds e.g. the current board have to pay out £300 per quarter for a photocopier that they do not have (and cannot find) and are liable to the lease company for the whole cost of the machine - £3000. The manager of the setting left because had been taking money from the group and HMRC are demanding payment for unpaid tax of £8000. This is just a sample of their current difficulties. Their current level of debt is around £20k.

Their local CVS has come in to bail them out and they have come to an agreement to pay back £10 per month which is all they can afford at the moment.

They would like to know about becoming an incorporated charity . The new board are keen to turn this group around and put in place all the necessary processes to ensure that the above doesn’t happen again. In view of their current liabilities would they be able to incorporate as a CLG - they understand that they may have to take on the liabilities of the previous board but am not sure how this would be viewed by either Charity Commission or Companies House?

On behalf of one of our member village halls: one of the members of their management committee (who is also the premises licence holder for the hall) has asked me if their would be any issues if he was to become the caretaker for the hall too, a role which he would be paid for. Please could you advise me on this, and if it would be acceptable to the Charity Commission.

Personal Liability.

A minority number of directors of an incorporated charity are concered that the failure by a majority of the directors to control restricted funds correctly and to abide by employment, health and safety etc legislation may be making them personally liable.

What action can they take to ensure that this is not the case?

Charlie

This is a supplementary to the question: "What legal form would suit this consortium?"

They are keen to be a limited company and will seek proper legal advice to help them draft the mem and arts, but I have brief question relating to transfer of assets.

The new company will take over the assets of an existing social enterprise company (not a charity in itself) but they also need to take on responsibility for a small charity with a shop which has a separate board. Can this charity remain independent but be supported / managed by the new company or is it possible for the charity to become part of the Ltd Company sharing a board, directors and gaining support and guidance from the new company?

Or is it possible to wind the charity down and transfer the assets to the new, non-charitable company?

I think that last suggestion might not be legally possible. The assets are neglibile and the shop makes very little money.