Unincorporated Association - Charitable

If your unincorporated association aims (or purposes/objects) are considered ‘charitable’ (as defined by law -see our section on ‘Charitable Purposes’) and your activities provide public benefit, you may be eligible for charitable status.

To meet the charity test and achieve charitable status, an organisation must have only charitable purposes and must provide public benefit in Scotland or elsewhere. In addition, it must:

• not allow its property to be used for non-charitable purposes

• must not allow Ministers to direct or otherwise control its activities

• must not be a political party, and not have as its purposes the advancement of a political party

Advantages

• tax relief on surpluses and donations

• access to funding only available to charities

• rates relief for premises

• special vat concessions

• allows you to apply for certain funds only available to registered charities

Disadvantages

• restrictions on spending

• cannot engage in party political activities

• must adhere to charity legislation

• trustees have specific duties under legislation

• governing document (constitution) must be approved by OSCR

• Required to notify any public register of the people serving on the management committee/ trustees

• Register and reporting requirements that are monitored by OSCR (e.g. annual accounts and returns)

Gaining charitable status also has the potential to increase confidence of stakeholders in governance, financial management and it the funding marketplace due to the regulatory requirements.

However, charitable status in isolation does not address the personal liability issue. There is still no limit of liability for members including the management committee. If this is something you want to avoid, then it might be worth considering changing your legal structure/ establishing as an incorporated body.

In some cases, if you would like to be a Charitable Unincorporated Association you should consider being a SCIO instead.