Charity trustees should protect their position

Posted 05/11/2010

A recent employment tribunal case has highlighted the need for charity trustees to think carefully about whether they should incorporate as a charitable company as soon as they start to employ any staff.

The case highlighted one of the key benefits of running any organisation – and in this instance a charity – through a limited company. By giving the organisation a ‘legal personality’ of its own, the individuals running it are generally speaking not personally liable for the financial obligations of the charity.

The Newcastle & North Staffs Play Council was registered with the Charity Commission from 1977 until March 2009. It was not incorporated as a charitable company. The employment tribunal recently decided that the ten individual trustees of the now obsolete charity are personally liable for more than