Disqualification orders
The Charities Commission has powers to make orders that prevent a deregistered charity from registering again for a set length of time, and to prevent an officer of that deregistered charity from being an officer of any registered charity for a set length of time.
The disqualification order could be for a minimum of one year, and for up to a period of several years, depending on the situation.
What situations might lead to a recommendation to disqualify an entity?
Examples of situations that might lead to a recommendation for a disqualification order against a charity and/or its officers include:
- Failing to
- keep adequate financial records
- actively pursue a charitable purpose
- take active steps to protect vulnerable beneficiaries
- take active steps to prevent further crimes of dishonesty in cases where a crime of dishonesty has occurred
- take active steps to prevent the diversion of funds or resources to terrorism
- take active steps to control suspect behaviour by a collector
- take active steps to prevent charitable funds being used for money laundering
- take appropriate remedial action after serious wrongdoing has occurred
- Practising poor financial management, which risks the security of funds collected from the public
- Allowing associated persons to receive private pecuniary profit which does not further the entity's stated charitable purposes
- Undertaking unlawful activities or purposes
- Persistently failing to file Annual Returns.
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What factors does the Commission take into account when making an order disqualifying a de-registered charity from registering again?
The Commission looks at such things as whether the charity or any of its officers have:
- adversely affected public trust and confidence in the charitable sector
- adversely affected the effective use of charitable resources
- engaged in conduct which breaches the Charities Act 2005, or been involved in serious wrongdoing.
It also considers whether the risk of the adverse activities continuing or recurring is likely to be reduced by making a disqualification order under section 31(4)(a) of the Charities Act.
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What is the purpose of an order preventing an entity from re-registering?
Allowing a period of time to elapse before the charity and/or its officer can re-apply for registration can:
- give the charity time to set in place remedial strategies; and/or
- allow the charity time to reflect on the issues leading to the deregistration; and/or
- protect the public from dishonest entities and individuals, where this is appropriate.
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Disqualification Orders
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