Dissolution clause

Every governing document needs to answer the question of what happens at the end. Get it wrong and the organisation may not be charitable at all.

Assets remaining on dissolution must go to another charity with similar purposes, or otherwise be applied for charitable purposes. A clause permitting distribution to members is fatal to charitable status — in Scotland it is one of the constitutional grounds that fails the charity test outright.

This is also a regulated alteration, so changing it later needs consent. Get it right at the drafting stage: see drafting your governing document.