Before you start there are a few common issues that you need to think about, whatever legal structure you choose. Your constitution is the rules and regulations for your charity – it’s important to get this right to try and avoid any issues in the future. The key parts of a constitution will include details about - name, purposes, powers, membership, meetings, election of trustees, how to make changes to your constitution and what should happen if the charity must close.
We know there's a lot to think about, so we've provided you with some model constitutions that you can edit.
Check with OSCR, Companies House, SCVO and your local Third Sector Interface whether there is another organisation which operates under a similar name. In terms of general legal principles, the other organisation could, raise a court action against the new organisation on the grounds of ‘passing-off’, i.e. on the basis that the public were being misled.
If there is an organisation with a similar name, but you think that they are unlikely to object, then it’s best to get a letter from them to that effect just in case a different view is taken in the future if new people come onto the board of that other body.
Under charity law, OSCR will refuse to register a charity if it considers that the name is:
You should not use the word ‘Limited’ in the name of a voluntary association or trust – if the body does not have limited liability, this is a criminal offence.
There are certain important considerations when choosing a suitable name for a voluntary sector company. For more information on this see the guidance from Companies House.
Your constitution should outline the purpose of your organisation, what kind of work it intends to do and how and where the work will be carried out. Your charitable purpose must also meet one of the 16 categories listed in legislation. Our information on what your charity will do will guide you through what you need to do.
Your constitution should outline how you will make any changes to it.
If you are a registered charity you will need to get permission from OSCR before you can make some changes to your charity. You can find out more about what kind of changes need consent from OSCR, the timescales involved and how to do this in their guide: Making changes to a charity
If you have members, they will have to formally approve any changes to the constitution. This is usually done by making the proposed changes available to your members and then going through a formal voting procedure where the members can raise any issues and then formally approve the changes. You should keep full records of this kind of change to your organisation.
An organisation which is a registered company must file a copy of their new articles of association with Companies House within 15 days of the changes being formally approved by their members (by passing a formal resolution).
You can't always predict the kind of changes you might have to make to your constitution. During the Covid-19 pandemic, for example, lots of organisations had to move their board and member meetings to an online format. In some cases this caused legal problems, as constitutions had been written with in-person meetings in mind.
Our legal partners at Burness Paull have updated all of our model constitutions so that organisations can hold meetings online.
At some point in the future you may decide or need to close your charity. Your constitution must include a dissolution clause which outlines what happens to any remaining funds or assets if your organisation needs to close down.
Winding up, or dissolving a charity needs consent from OSCR beforehand and formal approval from your members, if you have them.
For more information, see the OSCR guide: Wind up or dissolve the charity
If you’re setting up an organisation to carry out activities in a local area in Scotland you can get one to one help from your local Third Sector Interface (TSI) which supports local charities and voluntary organisations.
There’s a TSI in each of the 32 local authority areas across Scotland.
It is possible to set up a charity without legal or professional advice but if you are setting up a complex organisation you can make use of professional adviser such as a legal firm or a chartered accountant.