Civil Engagement for Acquiring Charitable Status-myassignmenthelp

Question: Discuss about theCivil Engagement for Acquiring Charitable Status. Answer: A charitable organization signifies an organization whose purpose is not to make profit at all and only indulge in the process of doing charity. The organization with respect to its constitution is required to direct all of its personal and real property towards achieving the purpose of charity. The only exception to this rule is that the organization may direct its money towards the maintenance and operation of the organization this also includes the expenses borne by the organization towards the payment of superannuation and remuneration to the employees of the organization (Henderson et al. 2015). Where the organization is a religious organization than money can be used for the care and accommodation of the members of the organization. Under the Charities Act 2009 the organization for being a charity has to promote a charitable purpose and where there is any excess profit it should be directed towards public benefits or the beneficiaries of the charity and not private gain. Section 3(1) of thee Act defines a charitable purpose. As per the section any purpose will be a charitable purpose if it is in relation to a public benefit and for the relief or prevention of poverty or economical shortcomings, the enhancement of education, promotion of a religion or any purpose which is for the benefit of the community. Any organization which wants to carry on operations and activities in the state has to be registered with the Charities Regulatory Authority. The Authority may refuse to register any organization by giving proper reasons. The registration as a charity can be done online. If the body which wants to operate as a charity is an organization it is mandatory for it to get registered irrespective of its income. The members of the organization may provide through the registration form that they are aware of their roles and responsibilities as the managers of a charitable organization. For the purpose of registration the charity has to provide certain information on registration which are as follows. Names of trustees and addresses at which they ordinarily reside Particulars of all bank accounts Supply constitution of charity Gross income of charity Name and principal place of business Places where charity operates or carries on activities Kinds of activity carried on by charity Amounts of money raised in last 12 months Manner in which charity raises money Details of professional fund-raising agents Advantage and Disadvantage This section of the paper discusses about an advantage and disadvantage of an organization for being registered as a charitable organization Advantage One of the biggest advantages of establishing a charitable organization is tax relief. A variety of tax exemptions are provided to a charity. Charities are exempted from paying Corporation tax on profits which arise out from operations conducted with respect to charitable provisions in form of primary purpose trading. Charities are provided with 20% discretionary and 80% mandatory exemption in relation to business rates also known as rate relief. Charities are also provided exemption on Gift Aid relief on donations received through individuals. Charities are also provided with a stamp duty land tax relief with respect to free hold property and also leases which have been acquired for a charitable purpose. Charities are also exempted from paying Value Added Tax on certain goods and services (Sugin 2015). Disadvantage One of the major disadvantages of registering an organization as a charity is that of an unpaid board. Unless it has been authorized by the Charity Commission and it has been provided in the constitution of the charity, the board members of the charity who are referred as trusties must not be paid. However it is to be noted that payment to those who are providing professional services to the charity is not prohibited, but prior to making any payments to the board a detailed explanation of why such step is being taken has to be provided by the charity. The authority to pay a trustee has to be incorporated into governing documents or the constitution with respect to the charity commission agreement. Thus the status of a charitable organization is not appealing to those founders of the organization who have the desire to retaining control and receiving salary. A founder of the charity can even be dismissed by its board and receives salary merely like an employee. The funder is usually u npaid and the control of the charity is shared by him with the other trustees (Mullins 2014). Legislation compliance A charity is imposed with several legal restrictions in relation to how its operations are carried out. The primary legislation which a charity must comply with in order to carry out its operations is the Charities Act 2009. Under section 41 of the Act it is an offence to claim or hold out that a charity is registered where in reality it is not. Any person who advertises on behalf of the charity or instructs another person to advertise on behalf of the charity that the charity has been registered, where has it has not been registered has committed offence under the section. It is an offence by any person to invite a person or to make members of the public provide money to the organisation where the organisation is not registered as a charitable trust. It is also an offence to accept gift earn money from any other person on behalf of the organisation which is not registered under the section. If the organisation itself indulges in the above discussed officers it would be liable on its own under subsection 2. The charity would be removed from the registers of the authority if it is found that it is indulging on promoting any activity which is unlawful, not in relation to public morality, against the principles of public policy or supports terrorism or operates for the benefits of an organisation which is unlawful. In case the organisation which is a body corporate has been convicted of an offence the registration of such organisation will be removed by the authority. Under section 53 of the organisation does not comply with the directions as provided by the authority it can be removed from the registers. It is the duty of the charity to keep proper books of accounts, have its accounts audited, issue annual reports, make statement of account every year and issue annual statement of accounts. A Trustee may be disqualified from his or her position if the Trustee has been adjudicated a bankrupt, is an organisation which is being wound up, makes a composition with creditors, serves a sentence in prison, convicted on indictment of an offence or is removed under section 74 of the Act. Under the Act it is an offence to act as a Trustee when a person has been disqualified from doing so. In addition it is also and offence to act on the instructions of a Trustee who has been disqualified. The legislation imposes a duty on the trustees, auditors, investment business firms or person involved in the process of the preparation of annual report to notify the authority of any fraud or theft committed by the charity. Disclosures which are made in good faith unprotected under the provisions of the Act. It is the right of the Authority under the Act to appoint an Inspector for the purpose of investigating into the affairs of the charity and for the preparation of a report. The Inspector has the power to require the charity to produce before him all books of accounts in relation to the operation of the charity and give any assistance which may be required by the officer for the purpose of completing his report. It is also the power of the officer appointed by the authority to examine the staff and trustees of the charity under oath. In case it has been found by the high court that a charity has not complied with the provisions laid down by that Act, it can pass any order with it thinks appropriate in relation to the situation. The court may order the removal or suspension of any trustee or member of the staff. The court may prohibit the charity from selling of its property or vesting the property of the charity in the authority as per the Act. The court may also appoint trustees on t op of or instead of existing trustees. The financial reports and accounts on activities has to be submitted to the Charities Section every year. Where the annual income of the organization is more than 100000 the accounts of the organization has to be audited. Charity organization have to implement proper control where they raise money by public subscription. Where the charitable body is closed the remaining fund and property of the body has to be transferred to a body having similar objectives. The organization must also have a governing document such as a deed of trust, constitution, rules of organization or the articles and memorandum of association. Yours Faithfully References Charities Act 2009 Henderson, W.H., Fowles, J., Smith, J. and Tudor, O.D., 2015.Tudor on charities. Sweet Maxwell. Mullins, M., 2014. What's killing the charities regulator?.Eureka Street,24(6), p.51. Peate, I., 2015. Charities: governance and accountability.British journal of nursing (Mark Allen Publishing),24(18), p.909. Sugin, L., 2015. Rhetoric and Reality in the Tax Law of Charity.Fordham L. Rev.,84, p.2607.