Charity Law Update - February 2015 - Registration of Charities
Since the establishment of the Charities Regulatory Authority (CRA) in October 2014, its initial priority has been the registration of charitable organisations. The initial Register will comprise of approximately 8,500 charitable organisations that already have a charitable tax exemption (a CHY number) from the Revenue Commissioners, and are therefore automatically deemed to be registered under Section 40 of the Charities Act 2009.
The Register of Charities is already in place and can be viewed on the website of the Charities Regulatory Authority (www.charitiesregulatoryauthority.ie). Entries on the Register are not yet complete, and the CRA will be adding to the information available on the Register in the months ahead. The CRA are writing to all charitable organisations that are deemed registered in order to obtain certain information to complete the registration process. Charities operating in Ireland that do not have a CHY number, including those foreign charities having a DCHY number, are required to register within six months of the establishment of the CRA, therefore by mid-April 2015.
In order to complete entries on the Register, or to register a charity, it is necessary first to create an online account with the CRA, which will provide access to the relevant section of the website. The entries on the Register will be populated from the responses given to the requests for information that the CRA has sent out to charitable organisations.
The information and documentation requested includes:
- Copies of governing instruments and details of all officers.
- Financial information including balance sheet date, gross income and sources, total expenditure and expenditure on salaries.
- Copies of financial accounts for the twelve months immediately preceding the application.
- Details of the charity’s purpose/objects.
- Details of activities, and how activities directly support the objectives of the charity, and how the public benefit test is satisfied.
- Details of how the charity intends to raise money.
- Details of risk assessment procedures, safety checks and safeguards employed by the charitable organisation where its activities include working with vulnerable people (including the aged, children and young people, the sick and disabled).
The charity trustees will need to sign a declaration form which is available for downloading on the website of the CRA.
Ongoing Registration Obligations
All information set out on the Register of Charities will be accessible by the public, and there is an ongoing obligation to ensure all particulars are correctly entered and updated. All charities are obliged to state on all public literature, including on telephone or the internet, that they are registered charitable organisations, and charities may be required to provide further information as may be prescribed by Regulations in due course.
Accounting and Audit
All charities are required to keep proper books of account, and there are detailed provisions in the Act setting out the obligations under this head. However, those provisions do not apply to charitable organisations that are incorporated under the Companies Acts.
Similarly, there are detailed provisions in the Charities Act setting out the obligations of charities to prepare statements of accounts and to have their accounts audited, but those provisions do not apply to corporate charitable organisations.
The obligations of corporate charitable organisations in relation to accounting, annual returns and audit will continue to be governed by the Companies Acts solely, and the Registrar of Companies will provide a copy of the annual returns of incorporated charities to the CRA together with all documents annexed to the annual return. The intention here is to avoid dual reporting for corporate charities.
All charitable organisations, including those established as companies, will have an obligation to prepare and submit to the CRA an annual report in respect of their activities in that financial year. The Charities Act provides that charity trustees must submit the report no later than 10 months, or such longer period as the CRA may specify, after the end of each financial year. The content of the annual reports will be determined by Regulations in due course, and it is likely that the requirements will include an activities report element and a finance reporting element.
There may be distinctions made in the Regulations in terms of the obligations of different classes of charitable organisations, which may depend on the level of annual turnover. The content of the annual report would be made available to the public, and all charities will be required to provide the CRA with any other information that it may reasonably require to enable it to perform its functions.