Friday 16 June 2017

UK: England and Wales: the fiduciary duties of members of a charitable company

The ICLR has published a summary of the recent judgment Children’s Investment Fund Foundation (UK) v Attorney General [2017] EWHC 1379 (Ch): see here. The judgment is noteworthy because it contains discussion of the extent to which the members of a charitable company limited by guarantee owed duties to the company that served to impose a limitation on the exercise of their voting rights as members. Such a limitation was found to exist.  To quote from the ICLR summary:
"A member of a company limited by guarantee without a share capital with exclusively charitable objects was bound in to the regime now contained in the Charities Act 2011, the whole thrust of which was to ensure that the assets of the company were used for its exclusively charitable objects and for no other purpose. In those circumstances the members of the claimant did not stand outside the charity; they were part of the administration of the charity and they could not lay claim to any private interest. It would be contrary to the whole regime established by the increasingly prescriptive legislative regime reflected in the 2011 Act if the member of a company such as the claimant could vote in his interests or in a manner detrimental to the charitable objects of the company".

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