Citation and commencement

1. This Order may be cited as the Charitable Incorporated Organisations (Consequential Amendments) Order 2012 and comes into force on the twenty eighth day after the day on which it is made.

Amendment of the Company Directors Disqualification Act 1986

2. Before section 23 of the Company Directors Disqualification Act 1986(3) insert-

"Application of Act to charitable incorporated organisations

22F.-(1) This Act applies to charitable incorporated organisations ("CIOs") as it applies to companies.

(2) Accordingly, in this Act-

(a)references to a company are to be read as including references to a CIO;

(b)references to a director or an officer of a company are to be read as including references to a charity trustee of a CIO; and

(c)any reference to the Insolvency Act 1986 is to be read as including a reference to that Act as it applies to CIOs(4).

(3) As they apply in relation to CIOs, the provisions of this Act have effect with the following modifications-

(a)in section 2(1)(5), the reference to striking off is to be read as including a reference to dissolution;

(b)in section 4(1)(a)(6), the reference to an offence under section 993 of the Companies Act 2006 is to be read as including a reference to an offence under regulation 60 of the Charitable Incorporated Organisations (General) Regulations 2012(7)(fraudulent trading);

(c)sections 9A to 9E(8) are to be disregarded;

(d)references to any of sections 9A to 9E are to be disregarded;

(e)references to a shadow director are to be disregarded.

(4) In the application of Schedule 1 to the charity trustees of a CIO, references to the provisions of the Companies Act 2006 are to be read as including references to the corresponding provisions (if any) of the Charities Act 2011 and regulations made under that Act.

(5) In this section "charity trustees" has the meaning given by section 177 of the Charities Act 2011.".

Amendments of the Employment Rights Act 1996

3. At the end of section 166 of the Employment Rights Act 1996 (unpaid redundancy payments: applications to the Secretary of State)(9) insert-

"(9) In this section-

(a)references to a company are to be read as including references to a charitable incorporated organisation, and

(b)any reference to the Insolvency Act 1986 in relation to a company is to be read as including a reference to that Act as it applies to charitable incorporated organisations.".

4. At the end of section 183 of that Act (insolvency of employer)(10) insert-

"(5) In this section-

(a)references to a company are to be read as including references to a charitable incorporated organisation, and

(b)any reference to the Insolvency Act 1986 in relation to a company is to be read as including a reference to that Act as it applies to charitable incorporated organisations.".

Amendments of the Charities Act 2011

5. In section 180 of the Charities Act 2011 (disqualification: exceptions in relation to charitable companies)-

(a)in subsection (1)-

(i)after "charitable company" insert "or a CIO"; and

(ii)after "director of the company" insert "or charity trustee of the CIO (as the case may be)";

(b)in subsection (2)-

(i)after "charitable company" insert "or a CIO"; and

(ii)after "director of the company" insert "or charity trustee of the CIO (as the case may be)".

6. In section 181 of that Act (power to waive disqualification), in subsection (5)-

(a)after "charitable company" insert "or CIO";

(b)in paragraph (a), after "director of the company" insert "or charity trustee of the CIO (as the case may be)"; and

(c)in paragraph (b), for "director of any other company" substitute "director of any company or charity trustee of any CIO".

7. In section 183 of that Act (criminal consequences of acting while disqualified), in subsection (2)(a) after "company" insert "or a CIO".

8. In the Table in Schedule 6 to that Act (appeals and applications to Tribunal), after the entry relating to a decision of the Commission under section 242 of the Act to refuse to confirm a resolution passed by a CIO insert-

EXPLANATORY NOTE

(This note is not part of the Order)

This Order makes amendments in consequence of the implementation of the provisions of the Charities Act 2011 relating to charitable incorporated organisations ("CIOs"). See also the Charitable Incorporated Organisations (General) Regulations 2012 ( S.I. 2012/3012) and the Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012 ( S.I. 2012/3013).

Although some of the amendments are to statutory provisions that extend to England and Wales and to Scotland, this Order extends to England and Wales only.

The Employment Rights Act 1996 is amended (articles 3 and 4) so that an employee of an insolvent CIO can apply to the Secretary of State for a payment out of the National Insurance Fund in respect of an unpaid redundancy payment (under section 166) or other unpaid debt (under section 182) in the same circumstances as an employee of an insolvent company.

The Company Directors Disqualification Act 1986 ("the 1986 Act") is amended (article 2) so that a CIO charity trustee can be disqualified in the same circumstances as a company director, and a disqualified person (whether a former company director or CIO charity trustee) is not able to act as a company director or CIO charity trustee in England and Wales. Under charity law in England and Wales a person disqualified under the 1986 Act is not able to act as a trustee of any other form of charity (section 178 of the Charities Act 2011). Certain provisions of the Charities Act 2011, relating to general disqualifications from being a trustee of a charity, are amended in consequence of the amendment to the 1986 Act (articles 5 to 7).

The Charities Act 2011 is also amended (article 8) by adding to the list of appeals and applications that may be brought to the Tribunal, so that certain decisions and orders of the Charity Commission relating to the dissolution of CIOs come within the Tribunal's jurisdiction. The list is in Schedule 6 to that Act, and it already includes other decisions of the Charity Commission relating to CIOs.

An impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is published with the Explanatory Memorandum alongside the instrument on www.legislation.gov.uk.