Charity liquidations

We take great pride in offering specialised support for charitable organisations facing the complex process of liquidation. In a world where every penny counts, we understand the unique challenges that charities encounter when navigating financial distress or closure.

Charities play a pivotal role in society, and their financial stability is crucial to fulfilling their missions. We recognise that circumstances may arise where liquidation becomes the only viable option. Our aim is to guide charitable organisations through this process with empathy, ensuring that every charitable penny is accounted for and disbursed according to the organisation’s values and legal obligations.

Our dedicated team possesses not only the technical expertise required for liquidations but also a deep appreciation for the charitable sector’s significance. We work diligently to streamline the liquidation process, minimising disruption to ongoing charitable activities and safeguarding the legacy of the organisation.

Whether you’re a small community charity or a larger non-profit entity, our tailored solutions address your unique needs, providing clarity and support during challenging times.

Solvent liquidations

We are able to deal with solvent Liquidations for Charities which have ceased operating. Where required, we can support the Trustees to deal with winding down any aspects of the Charity’s trading business and ultimately winding up the legal entity in a structured and transparent way. Any surplus funds would be distributed in accordance with the Charity’s Memorandum and Articles of Association.

Distressed charities

Where a Charity is unable to pay all of its liabilities, it may be that a Creditors Voluntary Liquidation is the best option as it provides a mechanism for an independent Insolvency Practitioner to maximise recoveries, deal with claims and conduct any necessary investigations.

We are experienced in managing the various challenges which this type of assignment can give rise to:

Role of the Trustees

Trustees tend to be objective and keenly aware of the risks of personal liability should they not take the right steps at the right time. That said, Trustees will often be passionate about the aims of the organisation and may struggle with a decision to close the business especially when the very people the Charity was seeking to support will be impacted. We strive to provide a clear analysis to allow Trustees to make decisions on an informed and transparent basis.

Role of management team

In situations where Trustees are not directly involved in managing operations, we recognise the importance of maintaining a working relationship with the management to allow an orderly handover of information.

Restricted funds

We have come across many instances where restricted funds were in fact mixed with other money which meant that they couldn’t be deemed to be held on trust by the Charity. Upon an insolvency, we will carry out a detailed analysis to establish how these funds should be dealt with.

Communications

Charities will often deal with vulnerable or young individuals and there will often be a high degree of sensitivity regarding the sharing of bad news. We work with Trustees to ensure that every reasonable step is taken to ensure that all impacted individuals are notified of the situation at the earliest stage.

Constitution of charity

A Charitable business can be constituted in many different ways. As a first step in understanding the options available to the Trustees, we establish how the Charity has been set up and whether it is in fact possible to wind up the Charity as a separate entity.

Director and officer policies

Trustees may have an insurance policy in place covering certain liabilities which may arise. We will work with the Trustees to establish whether the policy can or should be maintained, and how that can be funded.

Overseas activities

Where a Charity has operations in other jurisdictions, we will take steps to understand the nature of the UK entity’s contractual relationship with overseas stakeholders and either deal with them within the UK insolvency process or engage local professionals to provide assistance where necessary.

To find out more about how we can help charities through solvent liquidations as well as more distressed situations, contact us today. We provide a range of services for charities, offering a tailored solution for your needs.

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