Would be grateful if anyone can advise if an unicorporated body (a Charity) governed by it's statues, can adopt at a Trustees Meeting, that a Trustee's Liabilities are limited by gaurantee, e.g £100

The reason I ask that if a person had a major accident and it was deemed the fault of the Charity, and the insurance refused to pay out, a trustee who owned their own home may loose it.

Am I being overly concerned or is it usual to have this safety net?

If an accident was deemed the fault of the charity then it may be a criminal matter and limited liability doesn't make any difference.

It is normal for trustees to be limited liability but as far as I am aware you have to create a limited liability company to do this.

The liability is more financial than accident based, there are loads of unforeseen events (eg theft/fraud) that can cost far more than most small charities can afford.

You might want to read up on the Charities Commision site HERE

Thanks digging deeper. I will look at the link. The charity is small and so will not become limited. Will look into it further before I decide wether to open a can of worms or rock the boat.

Digging deeper I have found the relevent info on the site you sent me, but I now need to find out from the Charity if debts cannot be paid on time even if they have a property asset,wether I could be personally liable.Quote from their website:

Charitable companies are 'legal persons, can incur liabilities, and can become 'insolvent'. Such a charity can be deemed insolvent either:

when it is unable to pay its debts as they fall due; or
when the value of its assets is less than the amount of its liabilities taking into account its possible and prospective liabilities.
These two tests have a legal basis for charitable companies, as they are aspects of the definition of inability to pay debts in s123 of the Insolvency Act.

Unincorporated charities are not 'legal persons' and cannot technically incur liabilities, which are instead incurred by their trustees, acting on their behalf. Unincorporated charities cannot, therefore, technically become insolvent. However, a charity may reach the financial state where the value of the assets in the trust which are available to the trustees to settle their liabilities (see below) are insufficient. In the context of unincorporated charities 'insolvency' is used to describe this situation, and the tests referred to above may be relevant when deciding whether an unincorporated charity has reached it.

Yes, generally the trustees are equally and jointly liable for debts unless the charity is registered as limited liability.


Its certainly highly recommended you either have good insurance or go the plc route to cover your own finances.

Thanks for that

Its certainly highly recommended you either have good insurance or go the plc route to cover your own finances.[/quote]

Digging Deeper do you mean when you say to have good insurance do you mean myself personally to cover any of the Charity debts in capacity as Trustee or for the charity to have this insurance?

I am considering resigning as for some time the overheads of the Charity or not commensurate with income and there has been great difficulty recently to pay bills on time

If you are involved with the charity to the point that someone could come knocking on your door for money, resigning wouldn't be enough.

My advice is don't waste your time asking for advice on here, go and see someone qualified and quick!

The insurance could be either personal or with the club, but insurance being insurance, they like to take your money and not pay out. Generally it would only cover unforeseen liabilities such as getting sued by someone.

If the charity is in that state and there is no realistic plan to turn it round, it should be closed down. That doesn't preclude a similar charity starting up afresh immediately after with hopefully a mindset on what went wrong last time.

Its all fine and dandy volunteering for things like this but you have to be realistic about you personal liability in doing these things (that goes for first aiders and school governors as well!)

I have, as a first step, sent in my resignation this morning and will take it from there. I was not told the full extent of Trustee's liability when I was asked to join. The problem would be I imagine if bills not paid and the property did not get a buyer. Thanks so much as apart from advice you have given me the courage to throw in the towel!

Thanks Digging Deeper.

I now have a contact who will put me in touch to get professional advice. Thanks to both you and Wench for all your help and advice.