The Charities (Amendment) Bill 2022 Key Changes

Charities Bill 2022

By Shannon Power, 3rd August 2022

In April, the Minister for Rural and Community Development, Heather Humphreys, published the general scheme of the Charities (Amendment) Bill 2022. The Bill is set to provide several amendments to the existing Charities Act 2009, to improve and strengthen the ability of the Charities Regulator (CRA) to conduct its statutory functions and ensure greater public trust and confidence in the sector. 

Key Points of the 2022 Bill

  1. The Advancement of Human Rights is finally set to become a charitable purpose under Head 4 of the Bill. This means that organisations with specific references to human rights in their object clause will now be able and required to register as charities. Transition periods will operate to enable organisations working in the human rights space that have not already registered to do so. 
  2. The definition of ‘charitable trustees’ will be amended to exclude company secretaries or secretaries to the board who hold no other office in the charity. This is a welcome change that clarifies a problem that was previously identified in the 2009 Act.
  3. The new Section 54B codifies trustee duties. Subsection 4 intends to clarify the meaning of the phrase “misconduct or mismanagement” as it applies to charity trustees by specifically linking it to a breach of duty by a charity or a failure to take steps to remedy a breach.
  4. The Accounting standards of the Charities Statement of Recommended Practices (Charity SORP) will now be required by the CRA; however, an exemption will be allowed for accounts with a turnover that is less than €250,000, which is a major rise from the previous €100,000 cap. Charity accounts above the €250,000 threshold- both incorporated and unincorporated charities – will be required to prepare their accounts in line with the Charities SORP for audit. For the first time, charitable companies will be subject to CRA regulations when it comes to the preparation of their financial statement of accounts.
  5. The Annual Audit or Examination of Accounts threshold is to be lowered. The proposed amendment would, in effect, apply Section 50 of the Charities Act 2019 to those charities constituted as companies. This will ensure that all charities’ financial statements (over a specified threshold) are subject to statutory audit.
  6. new definition of the term ‘member’ has been inserted, which brings clarity to who a ‘member’ of a charitable organisation is (does not apply to a charitable trust). For companies, this is their subscribers or shareholders. For unincorporated associations (and bodies corporate that are not companies) these are the persons (excluding charity trustees) who are entitled to appoint, nominate, or vote for the appointment of an individual as a charity trustee.

Additional Changes to Come

Along with the key changes that were introduced in the Bill, there were some additional operational items to be noted:

  • The CRA now needs to be notified in advance, and approve of any changes, to an organisation’s Constitution.
  • The CRA has the power to now penalise charities who disobey the new law without having to refer to a court for approval before doing so.
  • The Bill also introduces new statutory fiduciary duties for charity trustees to act in good faith, avoid conflicts of interest, and exercise an objective standard of care, skill, and diligence when advancing the charitable purposes of the charity.

If you have any questions or enquiries regarding the information within this article, or if you are interested in registering a CLG company for Charitable Status, a member of our team would be happy to assist you. Please contact us today or call +353(0)1 6461625.

 

Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change. 

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