Chard Museum has grown in the size and the scale of its operations and ambitions since its original inception as an unincorporated charitable association in 1974. This has led to greater legal and contractual complexities which currently fall on the trustees and members individually because, as an unincorporated body, the Museum has no legal personality in its own right. The solution to alleviate this individual burden is for the museum to be incorporated and run as a Charitable Incorporated Organisation (CIO).
Position Paper: Chard Museum becoming a Charitable Incorporated Organisation
The advantages for an organisation such as Chard Museum in transferring to become a Charitable Incorporated Organisation are:
· making the Museum a legal entity in its own right, able to enter contracts and hold property as a legal person
· taking the individual responsibility for contracts and holding the charity’s assets off individual Trustees and members (four holding trustees, rather than the museum itself are currently responsible for the lease of the Museum premises)
· incorporation reduces the personal risk of being a Trustee of the charity, which can encourage people to stand for office (though Trustees can still be personally liable if they are found to have acted without due diligence or illegally)
· provides the opportunity to review, clarify and modernise the Museum’s constitution, to take account of changes in the law, in society and in technology
· incorporation through transfer to CIO is more straightforward than registering as a charitable company with Companies House. CIOs report only to the Charity Commission, are bound only by charity law, not charity and company law as is the case with charitable companies
· applying current best practice in charity governance, ensuring that Chard Museum is a strong and resilient organisation, able to use its assets and resources to best effect in furthering its charitable objects and public benefit goals
· demonstrating to funders that the museum is well governed and a more attractive recipient for their grants and investments
The process of establishing the new CIO, of transferring the assets from the old charity to the new one and winding up the old charity involves a lot of detailed work and some financial outlay to ensure that:
· everything is done legally,
· maximise the opportunity to review the governance of the museum
· interests of members and other stakeholders are taken into account
The Museum Committee has set up a working party to lead the process. Members will be asked to approve certain resolutions at key stages and will be kept informed throughout. The committee hopes the process will be complete by early 2021. However, once the CIO is established, members and the public will see little difference in the day to day running of the Museum. Incorporation by transfer to CIO is now the accepted route for smaller and medium sized charities to achieve the security provided by incorporation. Many museums in the South West and beyond have already completed this process and seen the rewards.
Specific questions can be directed to the Chairman at vince.lean@chardmuseum.com