How to close a charity
Tell the Charity Commission if you close a registered charity. You also need to make sure any property or assets are dealt with.
Applies to England and Wales
Close a charity – the law
Charities can close for a number of reasons, such as:
- a merger with another charity
- the original purpose has been met or is no longer relevant, for example treating a disease that has since been eradicated in the area the charity serves
- losing funds or funding
- a lack of members
- becoming a company or Charitable Incorporated Organisation (CIO), which means creating a separate charity
Legal requirement: you must tell the Charity Commission if your registered charity closes, and the Commission must remove it from the register of charities.
Before your charity can close
Consider if you can make effective use of the charity’s remaining funds by transferring them to another charity with compatible purposes. Read our guidance on transferring charity assets.
Alternatively, you might find a community foundation or some other charity may offer to continue to run your trust in line with its objects.
Check if your charity has any restricted funds, permanent endowment or ‘linked charities’. If you have linked charities, and you decide to close your charity, you will need to apply to the Commission to bring that linking to an end. This means that the linked charities will continue to exist, though you will have closed your charity.
If you want to close any of the linked charities, you must do that separately.
If your charity owns property you may need to sell it before you close. Follow any rules in your governing document.
Read the Commission’s guidance on selling land to understand the legal requirements.
If you decide to close your charity, you’ll need to clear all its debts and liabilities before you spend its remaining assets on your charity’s purposes. This will include checking if you have any:
- unspent grant money - if so, check if there is any specific agreement with the grantmaker about what to do with it where you are closing the charity
- money from fundraising appeals that haven’t reached their target - if so, check the Commission’s guidance on failed appeals to see if you need to return any donations to donors
You will then need to follow the right closure procedure for your charity; this depends on its structure.
Close an unincorporated association or trust
First, check if your charity’s governing document contains a ‘dissolution’ or ‘winding up’ section. This tells you how to close your charity. Most governing documents allow you to wind up your charity.
If your charity has members other than the trustees, your governing document may say that you have to call a meeting of the members to agree to wind the charity up.
You can use the Commission’s online charity closure form.
If your charity has permanent endowment, follow the legal rules to spend or transfer it before you close your charity. Find out what the rules are by reading the Commission’s guidance on permanent endowment.
If your governing document doesn’t say how to wind up, you can either:
- use all its remaining assets on your purposes
- give its remaining assets to another charity with similar purposes
Once you have spent or transferred the permanent endowment, disposed of any property, and dealt with other funds or assets your charity has, you can complete the closure form.
Close your charity if you are converting to a company or CIO
If you want an unincorporated association or trust to become a company or CIO, you have to form a new charity. Usually, you wind up the original charity and transfer its assets to the new charity.
If you have registered as a charity with HM Revenue and Customs, you need to tell HMRC if your charity structure changes from a trust to a CIO.
Close a charitable company
You must make sure your charity is removed from the Companies House register before it can be removed from the register of charities.
A charitable company has an automatic right to expend all of its assets on its purposes. You can tell the Commission that you have wound it up by completing the closure form.
Close a Charitable Incorporated Organisation (CIO)
You and the trustees must arrange for the CIO members to make a dissolution resolution. This applies if your CIO has a separate membership (a CIO association) or its trustees are the members (a CIO foundation).
This can either be:
- by a 75% majority of those voting at a general meeting
- without a vote if there are no objections to the question put to the meeting
- by unanimous agreement of the members (if no meeting is held)
The trustees must make a declaration that:
- any debts and other liabilities of the CIO have been settled or otherwise provided for in full
- says how any assets (including land or property) have been or are to be applied on dissolution
Within seven days of making the application, the trustees must give a copy of the resolution to every person who on that day is:
- a member of the CIO
- an employee of the CIO
- a trustee of the CIO (unless they were involved in making the application)
Once you have done the above, you can complete the Commission’s online charity closure form.
The Commission will publish a notice on your register entry stating that it has received your application. Subject to any representations, it will remove the CIO from the register after three months. The Commission must then publish a notice stating the day of removal. Unlike other forms of charity, a CIO automatically ceases to exist when it’s removed from the register.
When you complete the online charity closure form for a CIO, you will need to tell us:
- that no liquidator is acting for the CIO
- that you are acting on behalf of the trustees or the majority of them
- that you have followed the exact procedure as set out in your constitution
- the exact wording (not a summary) of the resolution passed to close the CIO
- that any debts or liabilities have been settled or otherwise provided in full
You also need to give details of how any property vested in, or held in trust for, the CIO has been or is to be applied in accordance with the directions in its constitution.
Your responsibilities after your charity has closed
After your charity is wound up, the trustees must arrange for its accounting books and records (including cash books, invoices and receipts) to be kept for either:
- at least three years after the year they were made (for a charitable company)
- at least six years after the year they were made (for unincorporated associations, trusts and CIOs)
The former charity trustees remain responsible for the decisions they made while they were in office.