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leanne-jones, Barrister
Category: Law
Satisfied Customers: 183
Experience:  Barrister
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Our Charity is a non profit making organization. The charity

Customer Question

Our Charity is a non profit making organization. The charity was set up to build a medical hospital in the deprived area of a third world country.
There were 4Trustees and two members in the charity initially. After one year at the first AGM of the incorporated company one of the members jined the Directors/ Trustees and further two extra individuals were added to the charity. Now the charity had 7 Trustees/ Directors/ Board Members. and one ordinary member.
A fund raising function was held in January this year. At that function it was found that the 5 of the trustees were involved in gross negligence and mismanagement of Public funds. The current charity bank account was closed down because the new trustees and one of the initial trustee triesd to make themselves the main signatories of the charity bank account without the knowledge of the Charity Chairman or the Treasurer. The same 5 trustees tried to open a new account d for the charity, but all the high street bankds that they approached, refused to do business wuth their names as the main account holders. the Situation arose where the charity was left without a bank account. to rectify this situation all the 5 board members/ Directors/ Trustees of the charity were forced to resign, their names were removed from the Charity commission as well as the companies house, only then the remaining two Directors/ Trustees/ Board Members were able to open the bank account for the charity.

In such circumstanced these board members who gave up their ordinary membership to become the members of the charity board are not demanding to be let back in as the ordinary members into the company.

In the companies articles of association all the initial board members are mentioned as subscribers to the charity. and then all of these subscribers except one became the board members. could you please let me know are we right to refuse the re-entry of these rogue Ex Trustees as ordinary members when they have already resigned as the board members. Especially when they were forced to resign because they could not open a bank account and we had to strike their names off the charity details published at the charity commission to facilitate the opening of the charity account. Please help?
Submitted: 3 years ago.
Category: Law
Expert:  leanne-jones replied 3 years ago.
Hello - my name is Leanne and it will be my pleasure to assist you today.

What does the articles say about admission as members? Do you have a right to refuse?
Customer: replied 3 years ago.

Unfortunately the articles of association does not mention anything about accepting or refusing a membership. under the clause Termination of membership , All it says is that if a member resigns,with a written notice to the charity unless, after the resignation, there would be less than two members.

It also says, The membership is terminated, if the member is removed from membership by a resolution of the directors that it is in the best interest of the charity that his or her membership is terminated.

According to the Articles of association,the subscribers to the memorandum are the first members of the charity.


We argue that as the company was using CIO Model of the charity law, whereby all the board members when become a trustees/ Directors of the company, they relinquish the subscribers status but become the board members. Are we right quoting this point, Please advise in detail and not just in one line please....


Expert:  leanne-jones replied 3 years ago.
To be clear they have resigned and have no membership at present?
Customer: replied 3 years ago.

This is the question I want to give me. I have given you an account of the facts, have told you why they had to resign and also I have told you by becoming the board members I think they relinquished the subcribers members status as they became board members/ Directors/ Trustees. Once they resigned as board members , they savered all their links to the charity I think, My question from you is that is it correct what I am saying about the status of the ex trustees/ Board Members / Directors?Please remember the charitatble company is a non profit making organization.


Expert:  leanne-jones replied 3 years ago.
I would agree. If they ceased to be Board members then my view is that they ceased to have any connection with the Charity.

As such they were no longer Trustees, Directors or even members. That means that any connection was terminated. As such if they wish to reapply to be a member, the charity has a discretion whether or not to allow them back in.

Clearly you have a decision to make whether or not to do that. Given what has taken place I imagine you wish to refuse membership, which is your right. You do not have to accept members, you are free to accept or reject whichever membership you want.

But at the point they resigned, they are no longer connected with the charity and any obligation to them would cease.

I hope I have answered your question and if I can be of any further assistance please do not hesitate to contact me.

Expert:  leanne-jones replied 3 years ago.
I'm just following up with you to see how everything is going. Did my answer help?


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