https://www.gov.uk/government/publi...le-companies-changing-your-governing-document
Changes that allow benefits to trustees, members, and people or organisations connected to them
The law allows certain payments and benefits to trustees, such as for:
- their reasonable and legitimate expenses
- providing goods and/or services in some circumstances
- trustee indemnity insurance
If your governing document has a clause that prevents the benefits that are allowed by law, you can amend it to remove the clause.
You do not need the Commission’s authority to do this unless there is a conflict of interest you cannot manage, such as when:
- the only members of your charity are its trustees, or
- there are not enough members who are not also trustees to vote on the change
You must have Commission authority to make changes to your governing document that would allow benefits other than the above to trustees, members and people or organisations connected to them (‘connected persons’).
For example, to add a new or amend an existing clause that allows your charity to:
- pay a trustee for doing their trustee role
- employ a trustee, member or connected person
- pay (or increase) interest to a trustee on a loan they provide to the charity
It is possible to add or amend a clause that says a benefit would only be allowed with the Commission’s authority. You must have the Commission’s authority to add or amend this type of clause.
It is also possible to add or amend a clause that allows benefits to people or organisations that do not fall in the category of ‘connected persons’ as defined in charity law. You will need the Commission’s authority if, when you decide to make these changes, there is a conflict of interest that you cannot manage.
Seek professional advice if you’re unsure about the right steps to follow or if you’re unsure whether someone is a connected person.
Be aware that some charities must report payments to trustees, members, and people or organisations connected to them in their
accounts and annual return, which becomes publicly available information.
Before you make changes, you should read our guidance about:
Ask the Commission to authorise these types of changes. The Commission will only give authority if we are satisfied it is in the best interests of your charity. You will need to explain why you are making the change, including:
- what your governing document currently says about benefits
- the factors you considered when you made your decision
- how you have managed the conflict of interest
