Charities Act 2011
What this means for your business
- Enforced by
- Charity Commission
- Applies to
- United Kingdom
- On this page
- 56 compliance obligations, 4 practical guides across 2 topics
What you must do
56 compliance obligations under this legislation — 3 can result in imprisonment.
Appointments 3
Appoint a new trustee when a vacancy arises
If your charity has been granted a certificate of incorporation, you must keep the board of trustees fully staffed. Whenever a trustee position becomes vacant, you have to fill it in the way your charity constitution, settlement or the certificate requires – normally by appointing a new trustee through the usual legal process.
Appoint a qualified auditor or independent examiner for charity accounts
If your organisation is an English NHS charity, you must have its yearly accounts checked. Depending on the charity’s size, the accounts must be audited by a statutory or local auditor; if the size thresholds don’t apply, the trustees must choose either an audit or an independent examination. The chosen examiner must meet the eligibility rules set out in the Act.
Appoint charity trustees before incorporation
Before your charity can be formally set up, you must have the trustees in place and approved by the Charity Commission. You need to ensure the right people are appointed as trustees before you apply for the certificate of incorporation.
Management duties 8
Consider Charity Commission guidance in charity decisions
If you run a charity, you must look at any guidance the Charity Commission publishes about the public benefit requirement and take it into account whenever you make decisions or carry out your trustee duties. This means checking the latest guidance and ensuring it influences your actions.
Disclose personal interests before charity transactions and claim only legitimate trustee expenses
Unlimited fineIf you are a trustee of a charitable incorporated organisation, you must tell the other trustees about any direct or indirect interest you have before the CIO makes any deal or agreement. You cannot profit personally from the deal unless you have disclosed that interest. You may be repaid only for costs you truly incurred while carrying out your trustee duties.
Ensure charitable property is used effectively when cy‑pres applies
If you act as a trustee of a charity and a situation arises where the charity’s original purpose can’t be fulfilled, you must take steps to make sure any property or assets are redirected in a way that still benefits charity. In practice this means arranging the transfer, sale or other use of the assets so they can continue to support charitable aims as closely as possible.
Implement direction from the Charity Commission and notify any name change
If the Charity Commission tells you, as a charity trustee, to change the charity’s name, you must carry out the change even if it conflicts with the charity’s governing documents. You must then promptly inform the Commission of the new name and the date the change took effect.
Include required statements in charity land mortgage documents
If your charity takes out a mortgage on land it owns or holds in trust, the mortgage must contain specific statements about the charity’s status and any court or Charity Commission approval. Where the mortgage falls outside certain exemptions, trustees also need to certify that they have taken appropriate advice. Without these statements, the mortgage may be invalid or less enforceable.
Obtain advice and confirm best terms before granting short‑term leases
If your charity is planning to grant a lease that lasts seven years or less (and isn’t a fine), the trustees must first get competent advice and be satisfied that the lease terms are as favourable as reasonably possible for the charity. You need to record that advice and the decision before you sign the lease.
Obtain consent before spending charity funds on a Bill
If your charity wants to use its money to draft, support or promote a Bill in Parliament, you must first get written permission from the Charity Commission or a court. You cannot spend charitable money on this activity even if your governing documents appear to allow it.
Show your CIO’s name on all required documents and land deeds
Fine up to £1,000If your organisation is a Charitable Incorporated Organisation (CIO) you must make sure its registered name is printed clearly on every piece of paperwork or communication where a charitable company would be expected to display its name – for example letters, invoices, contracts and website pages. The same rule applies to any deed or other legal document that creates, transfers, varies or ends an interest in land.
Notifications 3
Give public notice of a CIO transfer resolution when directed
If the Charity Commission tells your charitable incorporated organisation (CIO) to publish its resolution to transfer its undertaking to another CIO, you must make that notice public in the way the Commission specifies. This ensures transparency about the proposed transfer.
Notify the Charity Commission and stakeholders of a proposed amalgamation
If your charity (as a CIO) wants to merge with another CIO, you must publish a notice that will reach anyone likely to be affected and send a copy of that notice to the Charity Commission. The notice must also tell people how and when they can submit written comments to the Commission.
Publish public notice of a s.282 charity spending resolution
If the Charity Commission tells you to, you must publicly announce any resolution that allows the charity to spend a large sum of money. You also have to give the Commission any extra information it asks for, taking into account any comments from interested parties received within 28 days of the notice.
Other requirements 7
Act in good faith to further the charity’s purposes
If you are a member of a Charitable Incorporated Organisation (CIO), you must use any powers you have as a member to support and advance the charity’s aims. In practice this means making decisions and taking actions that you honestly believe will best help the charity achieve its charitable objectives.
Add “registered charity” statement to all public documents
Fine up to £1,000If your charity’s gross income last year was over £10,000, you must make it clear on every piece of material that you are a registered charity. This includes any adverts, fundraising letters, invoices, receipts, bills of exchange, cheques and similar documents. The wording must be legible and in English (or Welsh on wholly Welsh‑language documents).
Get Charity Commission approval before suing a charity
If you want to bring a legal claim against a charity, you must first get permission from the Charity Commission – unless the Commission refuses, in which case you need a High Court judge’s leave. This rule only applies when you are a person interested in the charity and plan to take legal action against it.
Include required charity statements in land sale/lease contracts
If you are preparing a contract to sell, lease or otherwise transfer land that belongs to a charity, the agreement must contain specific statements about the charity’s status and any required approvals. The contract must say the land is held for a charity, whether the charity is exempt, and, if not exempt, whether the transaction falls within the listed statutory exceptions or include the appropriate sanction/power statement. Failing to include these statements can affect the enforceability of the deal.
Obtain Charity Commission consent before restricted transactions
If your charitable company wants to carry out a transaction that would normally need approval from its members – for example a deal with a director – but is exempt because the company is a wholly‑owned subsidiary, you must first get written permission from the Charity Commission. Without that consent the transaction is invalid and could be treated as unlawful.
Show CIO status on all official documents and communications
Unlimited fineIf your organisation is a Charitable Incorporated Organisation (CIO) and its name does not already contain “charitable incorporated organisation”, “CIO” or the Welsh equivalents, you must clearly state that it is a CIO on every letter, form, website, sign, contract and any other document or communication. The statement must be in English unless the whole document is in Welsh. This means checking the wording on all your paperwork and adding a status line where it is missing.
Use charity assets only for its charitable purposes and follow the constitution
If you run a Charitable Incorporated Organisation (CIO), you must only use its property to further its charitable aims and must act in line with the CIO’s constitution. Members who have agreed to contribute assets if the CIO is wound up are also bound by the constitution, and any money they owe under it is treated as a normal debt.
Offences and prohibitions 7
Act as a charity trustee while disqualified
2 years imprisonmentIf you are barred from being a charity trustee (by a disqualification order under section 178 or 181A) and you still act as a trustee, hold an office or take employment for a charity, you commit a criminal offence. Conviction can lead to up to two years’ imprisonment and an unlimited fine, with the same penalties possible in either a magistrates’ court (summary) or the Crown Court (on indictment).
Breach a charity order prohibiting property or payments
Unlimited fineIf you or anyone acting for your charity disobeys an order made by the Charity Commission under section 76 – for example an order that stops you from disposing of charity assets, paying a debt, or making certain transactions – you commit a criminal offence. Conviction is dealt with in the Magistrates' Court and carries an unlimited fine. No prison term is prescribed for this offence.
Fail to disclose charitable status as required
Fine up to £1,000If your charitable company does not make the statutory disclosure of its charitable status (section 194) and you have no reasonable excuse, the company and any officer (including directors or shadow directors) commits a criminal offence. On conviction you face a fine of up to £1,000 and, if the breach continues, a daily default fine of up to 10% of that amount.
Fail to supply required charity documents to the Charity Commission
Fine up to £2,500If a charity does not provide the documents the Charity Commission requires (annual report, annual return or accounts) by the deadline, every person who was a trustee at that time commits a criminal offence. A guilty trustee can be fined up to £2,500 and, if the breach continues, faces a daily default fine of up to 10% of that amount for each day they remain a trustee. No custodial sentence is provided for this offence.
Hold out a body as a CIO when it isn’t
Fine up to £1,000If you tell people or represent a charity as a Charitable Incorporated Organisation (CIO) when it is not actually a CIO, you commit an offence. On conviction in the Magistrates’ Court you can be fined up to £1,000. There is no prison term for this offence.
Obstruct execution of a Charity Commission search warrant
51 weeks imprisonmentIf you deliberately block or interfere with the Charity Commission staff when they are carrying out a search under a warrant, you commit a criminal offence. On conviction you can be sentenced to up to 51 weeks in prison, an unlimited fine, or both.
Provide false or misleading information to the Charity Commission
2 years imprisonmentIf you knowingly or recklessly give the Charity Commission information that is false or misleading – either to meet a statutory requirement or because you know it will be used by the Commission – you commit a criminal offence. The same applies if you deliberately alter, hide or destroy documents you are required to show. Conviction can lead to a fine (up to the statutory maximum) and, on indictment, up to two years’ imprisonment or both.
Record keeping 7
Ensure proper accounting records for your charity and its subsidiaries
If you run a charity that has a parent‑charity structure or subsidiaries, you must make sure that adequate accounting records are kept for each entity. These records must meet the requirements of the Charities Act or Companies Act so that group accounts can be prepared correctly.
Keep charity accounting records for at least 6 years
If you are a trustee of a charity, you must hold onto all the accounting records created for the charity for six years after the end of the financial year they relate to. You must continue to keep those records even if the charity stops existing, unless the Charity Commission gives you written permission to destroy them.
Keep charity annual reports for six years
If your charity does not have to send its annual report to the Charity Commission, you must keep a copy of that report and any attached documents for at least six years after the financial year it relates to. Even if the charity closes down, the last trustees must continue to hold those records unless the Commission gives written permission to destroy them.
Keep complete accounting records for the charity
If you are a charity trustee you must keep up‑to‑date books that record every receipt and expenditure and show the charity’s assets and liabilities. This lets you see the charity’s financial position at any time and produce accounts that meet the required regulations.
Keep proper accounts and retain records for at least 6 years
If your organisation is an exempt charity, the trustees must keep accurate books of account, produce an income‑and‑expenditure statement (covering no more than 15 months) and a balance sheet at the end of that period, and keep those records for at least six years. The records can only be destroyed earlier if the charity stops existing and the Charity Commission gives written permission.
Preserve charity accounts for at least 6 years
If you are a trustee of a charity, you must keep a copy of the charity’s statement of accounts (or account and statement) for six years after the financial year it relates to. The last set of trustees must also retain these records unless the Charity Commission gives written permission to destroy them.
Preserve charity group accounts for 6 years
If your charity prepares group accounts, you must keep those accounts for at least six years after the financial year they relate to. The obligation continues even if the charity winds‑up, unless the Charity Commission gives written permission to destroy them.
Registration and licensing 8
Apply for conversion and register your company as a CIO
If your company wants to become a Community Interest Organisation, you must apply to the Charity Commission and give it the company’s resolutions. Once accepted, the Commission will register the new charity and the company’s registration will be cancelled. Keep copies of the resolutions, the registration entry and the cancellation notice.
Change charity company name when directed by the Charity Commission
If the Charity Commission tells your charitable company to change its name, you must have the directors pass a resolution to do so, inform Companies House of the change, and obtain a new certificate of incorporation. The new name only becomes official once the altered certificate is issued and it must meet the Companies Act naming rules.
Notify the Charity Commission of any amendment to your CIO constitution
When your charitable incorporated organisation (CIO) decides to change its governing document, you must inform the Charity Commission. Within 15 days of the resolution being passed you need to send the Commission the resolution, the updated constitution and any other information they ask for.
Obtain Commission consent before altering charitable objects and file it
Unlimited fineIf your charity is a company and you want to change its charitable purpose, how its assets are dealt with on dissolution, or allow any benefit to directors or members, you must first get written permission from the Charity Commission. Without that consent the change is invalid, and you must also send the consent to Companies House together with the amended articles or resolution.
Prepare a compliant constitution for your CIO
If you want to set up a Charitable Incorporated Organisation (CIO), the charity commission requires you to have a constitution that contains specific information. Your constitution must cover the charity’s name, purposes, office location, member liability, membership rules, trustee appointments, property directions on winding up, and be in the correct language and format. You need to submit this constitution when you register the CIO.
Register your charity and keep the registration details up to date
If your organisation is a charity that must be on the Charity Commission register, you have to apply for registration and send the required documents. Once registered, you must tell the Commission straight away if the charity stops operating or if anything in its governing documents changes, and provide the updated paperwork.
Register your charity as a CIO with the Charity Commission
If your charity has applied to become a Charity Incorporated Organisation (CIO) and the Commission gives consent, the charity must be added to the official register of charities. The entry will show the date of registration and a note that it is a CIO, and a copy of this entry will be sent to your main office.
Submit written application for charity incorporation
If you want to register a charity, you must send a written application to the Charity Commission that is signed by all the charity’s trustees. You also have to attach any documents or information the Commission asks for, and be ready to verify the information in the way they specify.
Reporting and filing 13
Apply to Charity Commission if charity loan may not be repaid
If you are a trustee of a charity and you realise the charity won’t be able to meet the repayment terms of a loan, you must ask the Charity Commission for an order telling you how to proceed. The Commission can extend the repayment period, set new repayment arrangements, or even write the loan off.
Enter merger details in the charity register
If your charity merges with another, you must ensure the Charity Commission’s register records the key details of that merger – the date any assets were transferred, the information required for any vesting declaration, and any other particulars the Commission asks for. In practice, you need to supply this information promptly after the merger so it can be entered in the public register.
Prepare and submit annual report when requested by Charity Commission
If your charity is unregistered and falls within the excepted categories, the Charity Commission can ask you for an annual report. You must then produce a report covering the charity’s activities for the relevant financial year, include any information prescribed by regulations, and send it (with any required accounts and auditor or examiner’s report) as instructed.
Prepare annual report for each financial year
If you are a trustee of a charity, you must put together an annual report each year. The report must include a summary of what the charity did during the year and any other information the Secretary of State’s regulations require.
Prepare group accounts for parent charities
If your charity is a parent charity at the end of its financial year, you must prepare a set of group accounts for that year. This applies even if, as a company, you are not required to prepare consolidated accounts under the Companies Act. The trustees must produce these accounts in addition to the usual annual statements.
Provide copy of most recent charity annual report on request
If someone writes to your charity asking for the latest annual report and pays any reasonable fee you set, you must send them a copy. You have two months from the date of the request to do so. This applies to every charity that prepares an annual report under the Charities Act.
Provide information and respond to Charity Commission on endowment fund spending
If your charity’s trustees decide to spend money from an endowment fund, you must give the Charity Commission evidence of donors’ wishes and any changes to the fund, and show you have met the earlier requirements under sections 282 and 283. The Commission then has up to 60 days (or a longer period if it suspends the timer) to tell you in writing whether it agrees. You can only spend the money if the Commission concurs.
Provide requested copies of the charity’s latest accounts
If someone writes to your charity asking for a copy of its most recent accounts, you must give them a copy – after you charge a reasonable fee for the cost of complying – within two months of the request. This applies to every written request, no matter who makes it.
Report material matters to the Charity Commission immediately
If you are an auditor or independent examiner of a charity, you must write to the Charity Commission right away whenever you find something important that could affect the Commission’s ability to supervise or protect that charity. This duty applies to you while you are acting as auditor or examiner, even after you finish the role.
Report subsidiary activities in annual report and send with group accounts
If your charity prepares group accounts for the year, you must add a trustees’ report on the activities of any subsidiary charities and any other information the Secretary of State prescribes. You then have to send this annual report together with the group accounts and the auditor’s (or examiner’s) report to the Charity Commission each year.
Report to Charity Commission as required for charitable company auditors
If you are appointed as a Companies Act auditor for a charitable company, you must fulfil the same reporting duties that apply to charity auditors under sections 156 and 157 of the Charities Act. In practice this means you must send the required audit information and any other matters specified by those sections to the Charity Commission.
Report to the Charity Commission when auditing group accounts
If you are an auditor working on a charity’s group accounts, you must notify the Charity Commission about certain matters that arise during the audit. This includes any irregularities, fraud or issues that the statutory reporting rules require you to bring to the Commission’s attention. The duty is triggered whenever you are appointed to audit or report those group accounts.
Respond to Charity Commission’s notice on certificate amendment
If the Charity Commission decides to change your charity’s certificate of incorporation, it must send you written notice and give you at least one month to comment. You (as a trustee/director) need to send any representations you have within that period.
Penalties for non-compliance
12 penalties under this legislation. 3 can result in imprisonment. 7 carry an unlimited fine.
Act as a charity trustee while disqualified
Unlimited fine and/or 2 years imprisonment
Obstruct execution of a Charity Commission search warrant
Unlimited fine and/or 51 weeks imprisonment
Provide false or misleading information to the Charity Commission
Unlimited fine and/or 2 years imprisonment
Disclose personal interests before charity transactions and claim only legitimate trustee expenses
Unlimited fine
Show CIO status on all official documents and communications
Unlimited fine
Breach a charity order prohibiting property or payments
Unlimited fine
Obtain Commission consent before altering charitable objects and file it
Unlimited fine
Fail to supply required charity documents to the Charity Commission
Fine up to £2,500
Fail to disclose charity name or status
Fine up to £1,000
Issue or sign charity document without required statement
Fine up to £1,000
Fail to disclose charitable status as required
Fine up to £1,000
Hold out a body as a CIO when it isn’t
Fine up to £1,000
Practical guidance
Our guides explain how to comply with the requirements above.
Social enterprise structures
Compare legal structures for trading with social purpose - CICs, charities, co-operatives, and community benefit societies.
Understand your duties as a charity trustee
The six key duties every charity trustee must follow, with guidance on eligibility, conflicts of interest, liability, and remuneration rules …
Register a charity with the Charity Commission
How to register your charity in England and Wales, including income thresholds, charitable purposes requirements, and the registration process.
Prepare charity accounts using SORP
How to prepare charity accounts following the Statement of Recommended Practice (SORP), including thresholds for receipts and payments versus accruals …
Sections and provisions
405 classified provisions from this legislation.
Duties 66
- s.16 The Commission's general duties
- s.17 Guidance as to operation of public benefit requirement
- s.18 Supply by Commission of copies of documents
- s.26 General duty of principal regulator in relation to exempt charity principal regulator in relation
- s.28 Commission to consult principal regulator
- s.34 Removal of charities from register charity which has ceased
- s.35 Duties of trustees in connection with registration change made with respect
- s.39 Statement required to be made in official publications etc.
- s.43 Duty of charity trustees on receiving direction under s.42 charity trustees
- s.45 Change of name where charity is a company
- s.61 Duty of trustees in relation to application of property cy-près
- s.71 Exercise of Commission's concurrent jurisdiction: notice
- s.73 Powers to make schemes altering provision made by Acts, etc.
- s.74 Restriction on expenditure on promoting Bills
- s.75A Official warnings by the Commission
- s.82 Removal of trustees etc.: notice
- s.115 Proceedings by other persons
- s.120 Requirements for leases which are for 7 years or less etc.
- s.122 Instruments concerning dispositions of land: required statements, etc.
- s.125 Mortgages: required statements, etc.
- ... and 46 more duties
Offences and penalties 12
- s.41 Offences
- s.49 Execution of search warrant
- s.57 Disclosure by Commission: Revenue and Customs information
- s.60 Supply of false or misleading information to Commission etc.
- s.77 Offence of contravening certain orders under s.76
- s.173 Offences of failing to supply certain documents
- s.183 Criminal consequences of acting while disqualified
- s.196 Criminal consequences of failure to make required disclosure
- s.214 Offence of failing to disclose name or status
- s.215 Offence of holding out that a body is a CIO
- s.345 Restriction on institution of proceedings for certain offences
- s.346 Offences by bodies corporate
Powers 106
- s.12 Directions as to what is (or is not) a separate charity
- s.19 Fees and other amounts payable to Commission
- s.23 Power to amend Sch.3 so as to add or remove exempt charities
- s.24 Power to remove defunct institutions from Sch.3
- s.32 Power to alter sums specified in s.30(2)
- s.33 Power to repeal provisions relating to excepted charities
- s.40 Power to alter sum specified in s.39(1)
- s.45B Power to delay entry of name in register following a s. 42 direction
- s.45A Power to delay registration following s. 42 direction
- s.46 General power to institute inquiries
- s.47 Obtaining evidence etc. for purposes of inquiry
- s.48 Power to obtain search warrant for purposes of inquiry
- s.50 Publication of results of inquiries
- s.51 Contributions by local authorities to inquiries into local charities
- s.52 Power to call for documents
- s.53 Power to search records
- s.54 Disclosure to Commission: general
- s.56 Disclosure by Commission: general
- s.62 Occasions for applying property cy-près
- s.63 Failure of specific charitable purposes: application cy-près
- ... and 86 more powers
Definitions 63
- s.3 Descriptions of purposes sport fire and rescue services the old law
- s.4 The public benefit requirement the public benefit requirement
- s.9 Interpretation institution
- s.10 Ecclesiastical corporations etc. not charities in certain contexts Ecclesiastical corporation
- s.11 Charitable purposes charitable purposes
- s.13 The Charity Commission
- s.20 Incidental powers
- s.21 The official custodian for charities
- s.22 Meaning of “exempt charity” and Sch.3 exempt charity
- s.25 Meaning of “the principal regulator”
- s.27 Power to make amendments in connection with s.26
- s.29 The register the register
- s.42 Power to require name or working name to be changed
- s.58 Disclosure to and by principal regulators of exempt charities subsidiary undertaking of the exempt charity disclosure provisions
- s.104 Meaning of “Scottish recognised body” and “Northern Ireland charity” Scottish recognised body Northern Ireland charity HMRC
- s.118 Meaning of “connected person” in s.117(2)
- s.129 Interpretation land
- s.132 Preparation of statement of accounts
- s.141 “Parent charity”, “subsidiary undertaking” and “group” undertaking
- s.142 “Group accounts” group accounts
- ... and 43 more definitions
Exemptions 52
- s.1 Meaning of “charity”
- s.2 Meaning of “charitable purpose”
- s.6 Registered sports clubs
- s.30 Charities required to be registered: general
- s.31 Restrictions on extending the range of excepted charities etc.
- s.38 Right to inspect register
- s.70 Restrictions on Commission's concurrent jurisdiction
- s.80 Other powers to remove or appoint charity trustees
- s.81 Removal or appointment of charity trustees etc.: supplementary
- s.85 Power to direct application of charity property
- s.88 Publicity relating to schemes
- s.89 Publicity for orders relating to trustees or other individuals
- s.90 Entrusting charity property to official custodian, and termination of trust
- s.110 Power to give advice
- s.114 Proceedings by the Commission
- s.117 Restrictions on dispositions of land: general
- s.119 Requirements for dispositions other than certain leases
- s.121 Additional restrictions where land held for stipulated purposes
- s.124 Restrictions on mortgages
- s.127 Release of charity rentcharges
- ... and 32 more exemptions