What else has to be in the governing document besides the objects?

England and Wales: This page sets out the position in full. Scotland: covered in full — and materially different from the other two nations: two of the clauses below are not just good practice here, they are a condition of passing the charity test at all — see below. Northern Ireland: covered in full — the same clauses matter, but they are reviewed case by case at registration rather than acting as a constitutional bar — see below.

Why these clauses can fail the Scottish charity test

This step covers the governing document clauses beyond the objects: powers, membership and dissolution. If you have not yet picked a model and settled the objects clause, draft your governing document first. The rules for these clauses differ in England and Wales, Scotland and Northern Ireland. OSCR‘s rules are the strictest.

A Scottish body can fail the charity test on grounds outside both the purposes list and the public benefit test. Those are the two things every other guide tells a founder to check. A constitution fails the test, even if its purposes and public benefit are fine, if it does either of two things.

It fails if it lets the charity’s assets leave charitable purposes on winding up. It also fails if it lets Scottish Ministers or a Minister of the Crown direct or control the body’s activities. Neither is a purposes problem or a public benefit problem.

Both are clauses. That is why they get their own step, not a paragraph tacked onto the last one.

The powers clause

The powers clause lets the charity do the ordinary things a working body does. It lets the charity borrow, hold property, employ, delegate and insure. A model document’s powers clause is usually wide enough already. The risk is narrowing it by accident while you edit something else, not needing to widen it.

Once the document is in force, trustees map their governing document to see what these powers allow.

In Scotland, the powers clause is also where the second disqualifier sits. A constitution fails the charity test if it expressly lets Scottish Ministers or a Minister of the Crown direct or control what the body does. That holds whatever the body’s purposes are.

No founder sets out to write this clause. It tends to appear where a public body was involved in setting the charity up. Someone adds a clause that reads as welcome accountability, not as a flaw in the structure. Check for it on purpose. Do not assume it is absent.

The membership clause

The membership clause is the one founders most often make too complex. A wide, open membership that anyone can join sounds democratic and inclusive. It is also the hardest kind to run once it exists.

Each member has rights under the constitution: to attend, to vote, to requisition a meeting. The trustees then have to honour those rights. So the question is not how open the membership can be, but what kind this board can run.

In a foundation model, the trustees are the only members. That model avoids the admin burden entirely and suits many small charities.

A wider membership suits a charity that needs an electorate. But it only works if someone will keep the register up to date and run the meetings that members’ rights call for.

The dissolution clause in each nation

The dissolution clause is, in effect, the charity’s own asset lock. When the charity ends, the clause stops its property going anywhere other than to charitable purposes. CIC or charity? explains how a CIC’s own asset lock differs. In Scotland, this is the disqualifier named above, applied to winding up.

A constitution fails the charity test outright if it lets the charity distribute or apply its property for a purpose that is not charitable. That applies on winding up or at any other time. The test is not about what the trustees mean to do in practice. It looks at the constitution’s own wording.

How the clause is used when a charity closes is covered in transfer or distribute the remaining assets.

Northern Ireland treats the same point differently. A governing document should have a dissolution clause. It should keep assets within the charity sector in clear terms. CCNI expects and checks for this as good practice. But it is not a hard bar to registration, as Scotland’s rule is.

CCNI reviews this case by case at registration. It may even let an applicant amend a defective document during the process, rather than refuse it outright. That route would make no sense against a disqualifier of the Scottish kind.

Here, England and Wales is closer to Northern Ireland than to Scotland. As standard, the model documents expect a dissolution clause that keeps assets within charitable purposes. That is reviewed as part of the application. It does not act as a stand-alone bar in the constitution.

What the document needs to say about paying a trustee

The governing document affects trustee pay differently in each nation. The difference matters when you draft, not just when a payment is proposed. Can charity trustees be paid? sets out the pay rules themselves.

In England and Wales and Northern Ireland, the statutory routes to pay a trustee work unless the document expressly bars that person from being paid. So when drafting, the usual task is not to write a new power in. It is to avoid shutting, by mistake, a door the founders may want open later.

Scotland works differently. A founder cannot just write a power to pay a trustee into a new Scottish constitution. It will not work the way it would in England and Wales. The Act protects pay authorised by a clause in the constitution that was already in force on 15 November 2004.

That is a fixed date in the past, not a moving one. A charity founded today has no route to that saving. The founders have to rely on the statutory conditions, a Court of Session order or another enactment, not on a clause that permits payment. Advice that says “put it in your constitution” is wrong in Scotland for any charity set up after that date.

With these clauses settled, the next step is to hold your founding meeting and adopt the document.

Common mistake: a dissolution clause permitting distribution to members

This clause is normal in a members’ club constitution. Founders adapting a club document carry it across. In Scotland it fails the charity test outright. It is one of three express disqualifiers, separate from purposes and public benefit. In each nation it is inconsistent with charitable status.

Common mistake: a constitution permitting ministerial direction or control

This clause can look like welcome accountability, especially where a public body is involved in setting the charity up. In Scotland it is a second express disqualifier. A constitution fails the charity test if it expressly lets Scottish Ministers or a Minister of the Crown direct or control what the body does.

Worked example

A sports club is converting to charitable status in Scotland. Its dissolution clause shares any surplus among members on winding up. The clause came straight across from the old club constitution. It has to be rewritten before the application goes in, not after OSCR refuses it.