What Does a Charity Law Solicitor Do?

Key Points

● A Charity Law Solicitor helps charities in England and Wales understand and follow the laws that apply to them. This includes advice on setting up, running, employing staff, handling property, and dealing with regulators.

● The Charities Act 2011 and the Charities Act 2022 are the primary statutes in this area. Both continue to be amended, with the most recent provisions of the 2022 Act brought into force in November 2025.

● Trustees of unincorporated charities may be personally responsible if the charity cannot pay its debts. Picking the right legal structure at the start is a practical way to avoid this risk.

● In Butler-Sloss & Ors v The Charity Commission [2022] EWHC 974 (Ch), the High Court confirmed that trustees may adopt ethical investment policies aligned with charitable purposes, provided they properly weigh the financial implications of doing so.

● A solicitor’s work goes far beyond setting up a charity. They also help with employment contracts, pensions, mergers, property sales, data protection, and dealing with the Charity Commission.

There are about 170,000 registered charities in England and Wales, each with legal duties for its trustees. If these duties are misunderstood, it can lead to problems with the Charity Commission or even personal liability. Getting advice from Pearce Legal’s charity law team at the right time helps manage these risks.

Charity law involves more than many trustees realise. It includes writing governing documents, advising on trustee roles, handling employment contracts, property deals, mergers, and responding to the Charity Commission. The key is knowing how charity law connects with company, employment, and property law, and applying that knowledge to each charity.

Formation, Structure, and Governance

When I help set up a new charity, I always start by looking at its structure. The main choices are an unincorporated trust, an unincorporated association, a company limited by guarantee, or a Charitable Incorporated Organisation (CIO). Each option affects trustee liability, paperwork, and registration in different ways, so it’s important to match the structure to the charity’s size, activities, and risk tolerance.

Most small and medium-sized charities now choose the CIO structure. It offers limited liability for trustees and lets the charity own property and sign contracts in its own name, without the extra paperwork required for companies. Trustees of unincorporated charities do not have this protection and may have to pay debts themselves if the charity cannot.

After choosing a structure, the solicitor prepares or checks the governing document. This step is important because unclear purposes or missing trustee powers can cause registration problems and issues later on. Charities earning over £5,000 a year must register with the Charity Commission under the Charities Act 2011. Pearcelegal supports charities from the first advice to full registration.

Governing documents can change over time. Changes to a charity’s purposes, name, or trustee powers may need a vote under the charity’s rules or approval from the Charity Commission. The Charities Act 2022 has made this process simpler since October 2022, with more changes coming in November 2025. A solicitor can advise which changes need approval and handle the process for trustees.

Recent Developments in Charity Law

A key recent case in charity investment law is Butler-Sloss & Ors v The Charity Commission for England and Wales [2022] EWHC 974 (Ch). In this case, trustees of the Ashden Trust and the Mark Leonard Trust asked the court to approve investment policies that excluded fossil fuels to match their environmental goals.

Mr Justice Green decided the trustees acted within the law. He explained ten principles for trustees to follow when considering non-financial factors in investments. The main idea is that trustees can exclude investments that go against the charity’s aims if they believe these investments could harm the charity’s reputation or lose donors, as long as they carefully consider the financial impact.

This case changed how many trustees think about investments. Before, many believed they always had to get the best financial return, even if it meant ignoring ethical concerns. Justice Green clarified that the main duty is to support the charity’s aims. Trustees can choose investments that match those aims, even if returns are lower, as long as they document their decisions properly. Legal advice helps ensure this process is done correctly.

The Charity Commission often uses its formal inquiry powers to look into possible problems in how charities are run. These inquiries let the Commission investigate, protect charity assets, and sometimes appoint an interim manager. The Commission also shares its casework data every quarter, and its 2024–2025 reports show that financial stability is still a top concern.

Practical Guidance for Trustees and Charity Managers

Most people come to me for legal help because a governance issue was left too long without advice. Trustees have clear duties under the Charities Act 2011 and the Trustee Act 2000. They must act in the charity’s best interests, avoid conflicts, and use reasonable care. What this means in practice depends on the charity, which is where a specialist solicitor can really help.

Here are the main areas where legal advice can make a real difference:

Employment and volunteers: Around 1.15 million people work in the UK charitable sector. Charities must comply with the same employment legislation as any other employer, including the Employment Rights Act 1996, the Equality Act 2010, and the statutory minimum standards on pay, working time, and leave. Volunteer arrangements require separate care; no employment contract exists, but a duty of care does.

Property transactions: Land held by a charity is subject to disposal restrictions under the Charities Act 2011. A solicitor's report confirming compliance is required before most transactions can proceed. Without it, a transaction can be unlawful regardless of the agreed terms.

Data protection: Charities hold personal data for donors, beneficiaries, and staff. Compliance with the Data Protection Act 2018 and the UK GDPR is a legal obligation. Fundraising activity is where charities most often trip up, particularly around consent for marketing communications. Mergers and restructuring: Combining two charities involves due diligence, asset transfer documentation, pension assessment, and registration of the merger. The Charities Act 2022 amended the rules on legacy protection for merged charities, so that gifts in Wills transfer automatically to the successor charity entered on the Register of Mergers, removing the need to maintain a shell entity.

Charity Commission proceedings: If the Commission contacts your charity with questions or opens a formal inquiry, seek legal advice before responding. An inadequately considered response can inadvertently create or escalate concerns that a careful reply would have resolved. Pearcelegal provides dedicated support for Charity Commission proceedings and investigations.

From my experience, picking the right structure early, keeping your governing document current, and getting advice before big decisions are the best ways to manage legal risks. You don’t need a solicitor at every meeting, but having one involved when setting up, before major property or employment issues, or if a regulatory question comes up, is very worthwhile.

Frequently Asked Questions

Do I need a solicitor to register a new charity?

You don’t have to use a solicitor to register with the Charity Commission, but having the governing document right from the start lowers the risk of rejection and future problems. The objects must meet the public benefit rule under the Charities Act 2011, and unclear objects are a common reason for registration delays.

Can charity trustees be held personally liable?

Yes, trustees of an unincorporated charity can be personally liable if the charity cannot pay its debts, since the charity is not a separate legal entity. Incorporated charities, like CIOs and companies limited by guarantee, protect trustees from this, but not if there is a breach of duty or intentional wrongdoing.

What happens if the Charity Commission opens an inquiry?

A statutory inquiry lets the Commission formally investigate mismanagement, protect charity assets, and take steps like removing trustees or appointing an interim manager. It’s best to get legal help right away, as a poorly worded response can make things worse. Pearcelegal supports charities through these inquiries and investigations.

Must a charity follow the same employment laws as a business?

Yes, charities must follow the same employment laws as any other employer. The Employment Rights Act 1996 and the Equality Act 2010 both apply. Because employment disputes in charities can attract more public attention than in businesses, it’s important to have clear, legal contracts and procedures from the start to protect both the charity and its staff.

What is the difference between a CIO and a charitable company?

A Charitable Incorporated Organisation (CIO) is a legal structure made just for charities under the Charities Act 2011. Unlike a charitable company limited by guarantee, a CIO only reports to the Charity Commission and does not have to file accounts with Companies House. This means less paperwork and only one regulator for most small and medium charities.

Pearcelegal has advised charities of all sizes since 1981. As one of the few specialist charity law firms in Solihull, we offer practical legal advice to charities in the West Midlands and across the UK. To book a free first consultation, call us on 0121 270 2700 or visit our charity law services page.