Part 3: Modernising the governing document

Many village hall charities approach OSCR with enquiries about changing or updating their governing document. Those governed by a Trust Deed often suggest it is outdated, unwieldy, or no longer reflects how the charity operates or would like to operate. Examples of the kinds of changes village hall charities seek are:

• changing the charity’s purposes
• amending or adding procedures for appointing charity trustees
• giving the charity trustees extra powers (for example the power to dissolve or to make changes to the governing document in future)
• changing procedure for calling and making decisions at meetings
• changing requirement to have accounts audited.

However, charity trustees can only make amendments to the governing document where they have the power to do so. Many village hall charities that were originally established by a Deed of Trust have found that the charity trustees do not have the power to make any changes to the terms of the deed. In which case they need to apply to OSCR to reorganise. The type of reorganisation scheme which would be applicable would be a scheme for a ‘variation of the governing document of the charity (whether or not in relation to its purposes)’.

Charity trustees considering applying for this type of reorganisation scheme should be aware of the following:

1. They can only vary the terms of their existing constitution, so where a village hall is a trust, it will still be a trust following the reorganisation, albeit with a varied Deed of Trust as its constitution.
2. An application to vary the constitution must be accompanied by a draft version of the revised constitution. In the case of a Trust, this would involve the charity trustees providing a legally competent draft Deed of Amendment or Supplementary Deed of Trust along with the reorganisation application. We would recommend that charity trustees obtain professional advice to assist in drafting this document.
3. Village halls considering incorporating in the future would need to ensure that the amendments they make to the constitution include giving themselves the power to wind up the Trust and transfer its assets to another charity.
4. To incorporate, the charity trustees would then need to apply for charitable status for a new company or SCIO (the proposed recipient of the assets) and once status was awarded, apply to OSCR for consent to wind up the Trust. 

So, although applying for a reorganisation scheme to vary the constitution can give the charity the powers it would require if the charity trustees were seeking to incorporate, this route involves more steps and is likely to take longer than it would have if the charity trustees applied for a reorganisation scheme for a transfer of the property of the charity to another charity.