The management committee/board must ensure that the organisation understands and complies with its own governing document, relevant laws, contractual obligations and the requirements of any regulatory bodies.
To help guide you through some key areas of law that affect the organisation and the Management Committee, we’ve provided brief introductions below.
There is a link for each, where you can access more information and key contacts. At the end of this section is a list of helpful websites for official information and advice, and suggestions for further reading.
If your group or organisation is a charity, then it is bound by charity law. This limits the scope of activities that can be carried out, as they must be recognised as being charitable. The Management Committee of charities are referred to in law as ‘charity trustees’. The primary legislation impacting on charities in Northern Ireland is the Charities Act (NI) 2008 and its amendment in 2013. See Legal Duties of Charity Trustee.
More on Charity Regulation.
If your organisation is set up as a company limited by guarantee, it is bound by the Companies (NI) Orders 1986-1990 and the Companies Act 2006. This requires a company to follow certain procedures, for example, in the calling of meetings and in the appointment of directors and a secretary. As a Management Committee of a charitable company, you are its directors and its trustees.
You must also, for example:
More on Being a Company Director
If your group or organisation employs staff, the Management Committee must ensure that it is a responsible employer and that the organisation complies with employment law. Not only is this a legal responsibility, but a breach of employment law may result in a claim from an employee, which can be extremely damaging to your organisation’s reputation and your finances.
Download: Employment Law Help Sheet
Every organisation has a legal responsibility to pay tax. There are various types of tax such as income tax and value added tax (VAT) on goods and services. Most charities are entitled to certain tax relief, if they are registered as such with the Inland Revenue. Whether your group or organisation is a charity or not, you must ensure that all relevant tax requirements are met (and paid!). For organisations that employ staff, PAYE and National Insurance Contributions payments are mandatory.
Fundraising is an important part of the life of any third sector organisation and you should be aware of relevant legislation and tax requirements. There are specific legal requirements, for example, for carrying out street collections, ballots and lotteries. In addition, VAT or other tax payments could be required as the result of some fund raising activities.
Fundraising has become increasingly challenging and has wide ranging implications both for how organisations can deliver their services, as well as how they are seen by the public. Putting in place effective systems for fundraising is important.
The Management Committee is responsible for overseeing how the organisation raises funds, as well as ensuring they are spent on what they were intended.
Download: Fundraising Help Sheet
Organisations enter into various contractual agreements, for example with grant providers or to purchase goods or services. The Management Committee is responsible for ensuring that any terms and conditions within these contracts are reasonable and complied with.
Download: Contract Help Sheet
If your organisation processes and retains personal information regarding individuals, then you need to be aware of what you should be doing to protect that information.
As the management committee, you are ultimately responsible under the Data Protection Act 1998 and need to ensure that your organisation’s practices are compliant.
The Data Protection Act 1998 specifies rules for how personal information is handled and stored. The data protection principles mean that information held on individuals must be:
Download: Data Protection Help Sheet
If your group or organisation works with children, young people and/or adults at risk, you need to be aware of some of the key pieces of legislation and standards and guidance relating to safeguarding, including The Safeguarding Vulnerable Groups (NI) Order 2007 (as amended by The Protection of Freedoms Act 2012).
These include obligations:
By complying with the relevant legislation and minimum standards of good practice, Management Committees will also be helping to safeguard the organisation, its staff and its volunteers.
Management Committee members are expected to ensure that their responsibilities and those of the organisation are carried out with due care. This duty of care may be breached through individual action (or failure to act) by Management Committee members, staff or volunteers, or through the activities of the wider organisation.
In either case, the Management Committee members remain ultimately responsible for ensuring that others do not suffer damage or loss through the organisation’s activities. As the employer, they are responsible for the actions of their staff or volunteers, even where the individual concerned failed to follow established rules or procedures. They may become personally liable for debts or claims which result from actions or inactions (see What is Liability?)
Everyone including Management Committees has a duty to take reasonable care to avoid causing injury or loss that could have been reasonably anticipated and prevented. If this duty of care is not met it may be considered negligence. Therefore, it is important that the Management Committee takes steps to keep people and property safe.
Download: Common Law Duty of Care Help Sheet
Having adequate insurance for your group or organisation is essential! Insurance not only provides protection against loss or damage, but also in some cases it is a legal requirement. The Management Committee is responsible for ensuring that your group or organisation is properly insured. For example, if you employ staff, it is a legal requirement to purchase employer’s liability insurance.
Other types of insurance that may be required include:
Download: Insurance Help Sheet
The vast majority of community and voluntary organisations involve volunteers – whether as Management Committee members or as individuals who help the organisation carry out its activities. The Management Committee needs to be clear about the particular legal issues that affect how volunteers are involved in the organisation.
The following information sheets are useful for volunteer-involving organisations.
Remember, volunteers are not employees. If your organisation involves volunteers, the Management Committee is responsible for ensuring that they are effectively managed and properly supported.