Q&As

A charitable trust is looking to dissolve. The trust will spend all of its funds accordingly. What is the practical process for winding up a trust and, more specifically, what resolutions must be passed at the final meeting(s) of the board of trustees?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 13/01/2021

The following Private Client Q&A produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • A charitable trust is looking to dissolve. The trust will spend all of its funds accordingly. What is the practical process for winding up a trust and, more specifically, what resolutions must be passed at the final meeting(s) of the board of trustees?

There are a number of reasons why a charity or charitable trust may need to be closed. These may include the original purpose ceasing to exist; the loss of funding; the merger with another charitable institution, or other reasons. However, trustees of a charitable trust do not have automatic powers to wind up the trust, unlike, for example, directors of a company. It is necessary firstly to consider the governing document—the underlying trust deed. This may contain provisions relating to the powers of trustees to dissolve the trust as well as in respect of the application of any surplus funds. The trust deed may set out the obligation of the trustees to call a meeting of members and obtain authorisation, or it may set out the basis

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