Liabilities of charity trustees, and how trustees are determined
Comments
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Sorry my phone posted too early, in an incorporated charity, after the members have paid their £1, where does the redundancy or damages bill get paid from?Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
the same place as any incorporated body - from the assets of the body. If there are insufficient assets then company law says unpaid staff wages have no higher claim to whatever cash is left than any other creditor, there may not be enough to cover everything. In that case some will be losers.Sorry my phone posted too early, in an incorporated charity, after the members have paid their £1, where does the redundancy or damages bill get paid from?
https://www.gov.uk/guidance/charity-types-how-to-choose-a-structure
If a charity structure is a corporate body, generally its trustees aren’t personally liable for what it does.
If your charity isn’t a corporate body (‘unincorporated’):
- the trustees are personally liable for what it does
- it won’t be able to enter into contracts or control some investments in its own name
- two or more trustees, a corporate custodian trustee or the charities’ land holding service will have to ‘hold’ any land on your charity’s behalf0 -
So if someone is awarded a large sum in damages against a charity (CIO) they don't get paid either?Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
So if someone is awarded a large sum in damages against a charity (CIO) they don't get paid either?
As already explained for any company that enjoys limited liability, on the winding up that company, any creditors will be paid whatever is left from the liquidation of assets.
There is no magic money tree.
Usually creditors are paid in proportion to the amount owed, but it can be more complicated as some creditors may be classed as preferential creditors.0 -
many thanks. If anyone has any official links supporting this, I would be most reassured.
Can I re-raise my other question in the OP about how someone would be defined as a director/trustee, without signing anything to say that. How would the 'performing the role' test be applied?Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
there are countless links covering the bankruptcy/liquidation/winding up of a company - use google. Here's one at randommany thanks. If anyone has any official links supporting this, I would be most reassured.
https://www.gov.uk/wind-up-a-company-that-owes-you-money/overview
take note of the big ! mark comment
it is explained in the link you yourself posted at #5Can I re-raise my other question in the OP about how someone would be defined as a director/trustee, without signing anything to say that. How would the 'performing the role' test be applied?
perhaps it would be wiser if you did not take on a trustee role?
see also
https://www.gov.uk/government/publications/the-essential-trustee-what-you-need-to-know-cc30 -
there are countless links covering the bankruptcy/liquidation/winding up of a company - use google. Here's one at random
https://www.gov.uk/wind-up-a-company-that-owes-you-money/overview
take note of the big ! mark comment
it is explained in the link you yourself posted at #5
I have been reading similar for over a year, but I can't see 100% that the trustees are not liable.
I don't feel that I have, and I feel I can evidence that I have not, but some of the volunteer jobs I have been doing for the charity could possibly be made to seem that I have if a court/whoever needed someone to call that in the unfortunate event.perhaps it would be wiser if you did not take on a trustee role?
see also
https://www.gov.uk/government/publications/the-essential-trustee-what-you-need-to-know-cc3Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
I admit I only skimmed that page, but I can't see it saying what you seem to think it says. The sentence which leapt out at me wasthis link says the same thing though: https://knowhownonprofit.org/leadership/governance/getting-started-in-governance/trusteesTrustees are the only people entitled to make decisions at a board meeting.
Have you been involved in voting at board meetings? Making decisions? Not just presenting options, but making decisions? the whole 'role of trustees' section seems to me to make it clear.Signature removed for peace of mind0 -
Two separate situations:So employees made redundant and with a notice period just walk away with nothing, or someone who sued the business for 120k damages, likewise?- Employees entitled to redundancy can claim that from the government.
- Someone who sues a limited company without knowing if it's going to be able to pay up has been badly advised, because there's no guarantee they will get what they are awarded.
Signature removed for peace of mind0
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