Q&As

Can a corporate charity (limited by guarantee), that is not insolvent, wind itself up? Are there any restrictions on how it should distribute the balance standing in its bank account? What is the process for distributing surplus assets?

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Published on LexisPSL on 18/05/2016

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • Can a corporate charity (limited by guarantee), that is not insolvent, wind itself up? Are there any restrictions on how it should distribute the balance standing in its bank account? What is the process for distributing surplus assets?

This Q&A covers solvent charities with no insolvency issues.

A corporate charity (limited by guarantee) has the same legal structure of a company limited by guarantee. A company limited by guarantee is treated in the same way as a company limited by shares when it comes to available insolvency procedures. Therefore a corporate charity (limited by guarantee) that is not insolvent can wind itself up. For further information, please see Halsburys Laws of England, Dissolution of charitable corporation.

There are several procedures available to wind up an insolvent charity, as can be seen in Practice Note: Charity insolvency—a guide to available insolvency proc

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