Charities Act 2009

89.

Permission to enter into certain agreements with charity trustees or connected persons.

89.— (1) A charitable organisation may enter into an agreement (in this section referred to as an “agreement”) with a relevant person for the provision by the relevant person of a service to, or on behalf of, the charitable organisation in consideration of the payment to the relevant person out of the property of the charitable organisation of such sum or sums as may be specified in the agreement or as may be determined in accordance with the agreement.

(2) An agreement shall be in writing.

(3) Any sum or sums payable to a relevant person under an agreement shall not exceed what is reasonable and proportionate having regard to the service provided by the relevant person pursuant to the agreement.

(4) Subject to subsection (5), a charitable organisation shall not enter into an agreement unless the charity trustees of the charitable organisation, other than any charity trustee who—

( a) will provide a service under the agreement,

( b) provides a service under an agreement other than the agreement referred to in paragraph (a),

( c) is in receipt of remuneration out of the property of the charitable organisation other than in accordance with an agreement, or

( d) has a personal connection with a person who—

(i) will provide a service under the agreement,

(ii) provides a service under an agreement other than an agreement referred to in paragraph (a) or subparagraph (i), or

(iii) is in receipt of remuneration out of the property of the charitable organisation other than in accordance with an agreement,

are satisfied that the agreement would be in the best interests of the charitable organisation.

(5) Where, in relation to a charitable organisation, there is only one charity trustee, the charitable organisation shall not enter into an agreement unless—

( a) the charity trustee is satisfied that the agreement would be in the best interests of the charitable organisation, and

( b) the Authority gives its approval to the charitable organisation entering into the agreement.

(6) A charitable organisation shall not enter into an agreement in contravention of the provisions of the constitution of the charitable organisation.

(7) The Authority may give directions or issue guidelines in relation to the making of agreements to which this section applies.

(8) A person to whom a direction under this section applies shall comply with that direction.

(9) A charitable organisation shall, before entering into an agreement, have regard to any guidelines issued by the Authority under this section.

(10) This section shall not apply in relation to—

( a) any remuneration paid to a person in his or her capacity as a charity trustee or under a contract of employment, or

( b) any remuneration to which a person is entitled in accordance with law or a provision of the constitution of a charitable organisation.

(11) Where, in relation to an agreement, there has been a contravention of this section, the agreement shall be null and void.

(12) Subsection (11) shall not operate to prevent a charitable organisation from recovering damages in respect of any loss incurred by it by virtue of an agreement to which that subsection applies.

(13) In this section—

“relevant person” means, in relation to a charitable organisation—

( a) a charity trustee of the charitable organisation, or

( b) a person with whom a charity trustee of the charitable organisation has a personal connection;

“remuneration” includes any benefit in kind;

“services” includes goods;

“sum” includes benefit in kind.