MANAGING PROPERTY AND OCCUPIERS

We have recently acted for a client in a case that highlighted the importance of proper management of a charity’s paperwork.

The charity ran a Centre. The Centre was composed of a number of rooms, which they allowed local community groups to occupy. Occupation was supposed to be under the terms of a ‘licence’, which would allow the charity to recover possession of rooms if necessary. The charity itself occupied the Centre under a business tenancy, the terms of which forbade the granting of subtenancies.

The charity fell into a dispute with one occupier, and was taken to court: the occupier claimed to be a tenant, and not to be occupying under a ‘licence’. After a two day trial the court was satisfied that the occupier had been a licensee, and the charity therefore won.

The Judge in the trial did make the point (which had become apparent during court proceedings), that management of documents relating to occupation of the Centre was haphazard. Although the Centre is now under new management, the Judge noted that there were large, apparently undocumented, gaps in the history of occupation. Some documents appeared to be unsigned, the legal effect of the documents was not always clear, and, through no fault of its own, even the charity’s lease from its own landlord did not seem to be in a form signed by all parties. Even when documents did exist, they were not always readily available to the relevant individuals.

The message was one that applies to anyone managing property. Maintaining proper documentation is an insurance policy against future uncertainty and litigation. You should always make sure that such important information is a matter of ‘corporate memory’, and not exclusively the responsibility of an individual who, if they leave, will take the information with them.

For further information, please contact:
PAUL GREATHOLDER on 020 7440 4824 or Paul.Greatholder@russell-cooke.co.uk

 

COMPANIES ACT

Many charities are established as companies and governed by company law, which has been hugely changed by the Companies Act 2006. The Act is being rolled out in phases over the next couple of years. The first implementation date is 1 October 2007, when changes to the following areas will be brought into force:

• company directors’ duties
• the definition of connected persons
• abolition of the need to hold a general meeting changes to written resolutions
• obligation to give proxy votes to members

These all have rather important implications for charities. The changes will mean re-visiting and updating job descriptions for trustees and, in most cases, providing them with training on the effects of the new law. Trustees will need to consider:

• whether they are going to take advantage of the opportunity to stop holding general meetings; and
• the implications for the internal politics of the organisation of arming the members with proxy votes.

These changes need to be planned for now.

For further information, please contact:
JAMES SINCLAIR TAYLOR on 020 8394 6480 or James.Taylor@russell-cooke.co.uk

 

DO YOU NEED A GENERAL MEETING?

Charities have traditionally had an annual general meeting. For charities which are companies, they have done this not only because of tradition, but because it was a legal requirement unless the members unanimously agreed not to have one. From 1 October 2007, there will not be a legal obligation for charitable companies to have an annual general meeting.

Before organisations heave a sigh of relief and abolish the annual general meeting, they are going to need to look at their articles of association. In many cases the articles will require an annual general meeting. While doing this, it would be sensible to review the articles as a whole to enable the charitable company to take advantage of the more general liberalisation that the Companies Act makes possible

The change will not be without its complexities. If you stop having AGMs, what will mark the end of the term of office of director trustees? One compromise position, which is beginning to emerge in our discussions with clients, is that they may wish to have an annual meeting, not least because of the public relations and election implications, but separate out what one might describe as the boring bits, in particular appointing auditors and dealing with the accounts. This will also free up organisations to have an AGM at the time of year that it suits them. Many organisations feel obliged to have their AGM to fit round their accounting cycle and therefore find themselves holding it in the middle of the summer when it is highly inconvenient for their membership. With appropriate amendment of articles, it should now be possible to have a leaner annual meeting, not tied to a timetable driven by account preparation and fitting in with the charity’s own timescale.

For further information, please contact:
JAMES SINCLAIR TAYLOR on 020 8394 6480 or  James.Taylor@russell-cooke.co.uk

 

FORTHCOMING EVENTS:

SEMINAR: Role of the Company Secretary

A review of the company secretary’s duties and responsibilities and key procedures in the wider context of company and charity law.

Wednesday 16 May 2007, 8 Bedford Row, London WC1, 5.30 – 7.30 pm

Further information and a booking form can be found at:
www.russell-cooke.co.uk/serv_charities_events.htm

 

DIARY DATES:

Annual Trustee Conference

Thursday 21 June, the Royal Society of Arts, London. For further information please see our brochure at:
www.russell-cooke.co.uk/downloads/Trustee_Conference_2007.pdf

Employment Conference

Thursday 28 June, Directory of Social Change, London NW1 2DP. For further information please see our brochure at:
www.russell-cooke.co.uk/downloads/Employment_Law_Conference_07WEB.pdf

To register your interest, contact: Rhonda Chang on 020 8394 6493 or Rhonda.Chang@russell-cooke.co.uk

 

OTHER EVENTS:

For a full list of forthcoming events see the Charity Team’s web-site at:
http://www.russell-cooke.co.uk/serv_charities_events.htm

The Charity Team
Russell-Cooke Solicitors, 2 Putney Hill,
Putney, LONDON
SW15 6AB

Tel: 020 8789 9111
www.russell-cooke.co.uk

 

This material does not give a full statement of the law. It is intended for guidance only, and is not a substitute for professional advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be accepted by Russell-Cooke.

© Copyright: Russell-Cooke, January 2007

To subscribe to this monthly legal update please visit http://www.russell-cooke.co.uk/serv_charities_intro.htm and fill in the online request form, or send an email including your name and email to, charitylegalupdates@russell-cooke.co.uk

An archive of past updates can be found at http://www.russell-cooke.co.uk/serv_charities_updates.htm

If you would like to reproduce some or all of our updates in your own publication, contact Shivaji Shiva on 020 8394 6486 or e-mail on shivas@russell-cooke.co.uk