Charity formation, mergers and restructuring

They are very realistic and have an integrity which has won them their reputation and means that they get listened to.

Chambers UK

There are many different forms of charities and social enterprises, with contrasting features, membership structures and tax treatment, so it is important to be aware of all the options before starting a new entity. Once established, these organisations, just like ordinary businesses, may go through periods of rapid growth or change.

Our highly experienced team works with charities at all phases of their development from start-up, through to restructuring and winding up. In the early stages, we help to identify the right structure for the charity, foundation or social enterprise organisation, based on the client’s aims, sources of funding and the availability of tax incentives. We then assist with the preparation of suitable governing documents for the new entity and guide clients through the process of registering with the Charity Commission or other regulators.

After registration has been successfully navigated, we provide support on setting up internal practices and procedures which will enable an organisation to establish a good governance structure. As part of this work, we offer induction training for trustees and directors to help them understand their roles and responsibilities.

We are equipped to help established organisations with their growth plans including taking on new partners, collaborative projects, internal restructuring and full mergers. Our experience ranges from setting up trading subsidiaries and the incorporation of charities through to mergers of large national charities and collaborations to establish multi-million pound research institutions.

We are also able to support charities if they are winding up their activities, either because their purpose has been fulfilled or because there are funding or financial difficulties. We regularly work with accountants and insolvency practitioners to advise on the practicalities of closing down a charity or transferring its assets to another entity.

Our charity law solicitors have successfully acted for all sizes of charity from international enterprises through to local community groups and family-run charities. The team’s breadth of experience allows us to assist with both the legal and practical challenges that the trustees and senior managers face through periods of strategic growth and reduction.

We offer expert advice on:

  • setting up new charities and social enterprise organisations
  • establishing charitable trusts, charitable incorporated organisations (CIOs) and companies limited by guarantee
  • setting up community interest companies, B-corps, and industrial and provident societies
  • mergers and acquisitions involving other charitable trusts and companies, by change of control and subsequent restructuring or transfer of assets and operations
  • creation of and amendments to royal charters and liaising with the Privy Council
  • reviews of restricted funds and permanent endowment
  • joint ventures and collaborations between charities and with private and public sector organisations
  • social enterprise for charities and not for profits - setting up and restructuring trading arms, innovative loan arrangements and private equity finance
  • restructuring charitable groups and simplifying trust structures
  • issues faced by international charities, particularly in relation to working in dysfunctional and dangerous political regimes and disaster areas

Recent work highlights

Integration and merger management

Advising on the merger of two large national charities with multiple sites and a substantial number of employees, including project managing the merger process and providing guidance on the practical considerations to make it as successful as possible.

Research collaboration

Acting for a university on funding arrangements and collaborative working for a new multi-million pound research institute.

Operational restructuring

Reviewing the trading subsidiary arrangements for a sizeable charity and advising on and implementing a restructuring of the group of trading subsidiaries.

Related expertise

Penningtons Manches Cooper LLP

Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority under number 419867.

Penningtons Manches Cooper LLP