A trust is the traditional structure for a charity, adopted by many older groups. For the trust to also be a charity, the Charity Commission for Northern Ireland must approve its purposes and activities.
Trusts are unincorporated and do not have any independent existence in law. Therefore, the trustees are personally responsible for any debts or claims against the organisation that cannot be met out of the organisation’s own resources.
Type of organisation: Trust
Legal Status: Unincorporated
Governing Document: Trust Deed
Common Examples: Grant-making bodies; an organisation to be run by a very small number of individuals
Key Features
As trust has:
- a set of rules called a trust deed
- no membership
- no ownership of property (property must be held by named trustees or custodians)
- an agreed purpose for which it is set up to work towards
- no separate legal identity
- a small group of people, called ‘trustees’ who are personally liable for any debts and claims against the organisation that cannot be met out of the organisation’s own resources
When is it appropriate?
An trust may be an appropriate when some or all apply:
- the organisation is to be run by a fairly small group of people
- there is no time limit on how long the trustees will be in office
- new trustees will be appointed by continuing trustees
- the administration of the organisation is going to be simple
- the organisation is to be a grant-making body only
- land and building are to be held on trust for permanent use for the purposes of the charity
More on the advantages and disadvantages of different legal structures.
