Proposal to change NSUN from a charitable company to a charitable incorporated organisation
Last year, we let you know about a governance issue in our articles of association causing NSUN members to be liable in the unlikely case of insolvency. This summer, we commissioned an internal report on membership structures that would help us address this issue.
As a result, the NSUN Board of trustees are proposing to change the legal structure of NSUN from its historic status as a charitable company to a charitable incorporated organisation (or CIO). This change would have advantages such as reduced regulatory and administrative responsibilities, and will remove the £10 liability for members. It will not affect any of the work we do or our status as a membership organisation regulated by the Charity Commission.
The proposed change will be down to a member vote at our AGM on the 29th November 2021. You can read more about this below, which may be helpful when deciding whether you want to vote for or against the change as a member. The information tells you about the reasoning behind the proposed change and some key points from our new governing document, the proposed constitution.
Reasoning behind the proposed change to a CIO
- As a CIO, NSUN will continue to be a membership organisation with members being at the core of everything we do. Membership arrangements will not change.
- The trustees will continue to be the governing body and their responsibilities will not change, although they will no longer be company directors. The roles of the CEO and the other managers will not change either.
- We will still hold AGMs at which the Chair and the CEO report to you about the year’s activities and you appoint the trustees and decide other important matters.
- We will keep our existing name, bank accounts and can continue to receive legacies left to the original charitable company.
- We will be registered with and regulated by the Charity Commission as we are now, ensuring that the standards for how charities are organised and run are followed.
- As we are currently a charitable company, we have to be registered with Companies House as well as with the Charity Commission. If we go ahead with the change to a CIO, this additional layer of regulation stops. This means that while we will still have to submit various reports to the Charity Commission each year, we will no longer have to send additional reports to Companies House.
- Currently, NSUN members could have to contribute up to £10 each in the unlikely event that we became insolvent. This requirement stops if we become a CIO.
- We will replace our existing articles of association with a constitution as our governing document. The constitution is more suitable for charities like us as charitable companies’ articles are based on the ones used by commercial companies.
Key points from the proposed constitution
The proposed constitution closely follows the model recommended by the Charity Commission for organisations like us with a large number of members, ensuring we comply with good practice and meet the requirements of the law. Key takeaways include:
- The provisions on membership are essentially unchanged from our current articles of association. You will continue to receive the annual report, appoint the trustees and vote on key matters at the AGM. Trustees will continue to be responsible for day-to-day management and administration.
- Once the constitution is approved, it can only be amended by a vote of the members.
- Membership will continue to be open to anyone interested in furthering our objectives. There are currently no membership fees for individuals or user-led groups, and no plans to introduce any.
- Trustees will still step down by rotation, with one-third of them stepping down at each AGM based on the length of service since their last appointment. They can then be reappointed for subsequent terms, as is currently the case.
- The provisions concerning AGMs and other members’ meetings are essentially unchanged from the articles of association except that both postal and emailing voting may be possible in the future.
- It may also be possible in future for us to send official communications to the members by email or by publishing notices on the website. This is not currently an option under the articles of association.
We recommend you take some time to read through the constitution (which has now been sent to members via email) and if you have any questions, please get in touch with Akiko Hart at firstname.lastname@example.org or Amy Rushton at email@example.com.
Online voting will take place and results will be communicated in the AGM Business Meeting on the morning of day 1 of our AGM & Members’ Event, which you can sign up for here.