SU legal status changes

The Students’ Union will be registering as a charitable company limited by guarantee following the results of last week’s referendum.

The results showed that 919 students voted for the motion titled ‘Changing the Way this Union is Run’, compared to 344 against. There were 503 abstentions.

The SU must legally change its charitable status following the Charities Act 2006, which came into force this year.

While it was previously registered as an unincorporated association with exempt charitable status under the Education Act of 1994, the Union are now legally required to register with the Charity Commission as an organisation with a turnover of over £100,000 a year.

The Union is following National Union of Students’ legal guidance who are being advised by Bates, Wells and Braithwaite.

There were three options open to the Union: an unincorporated organisation, a charitable incorporated organisation, or a charitable company limited by guarantee.

The choice of the charitable company limited by guarantee was favoured as the best-tested option, where the Trustees and members would have limited liability.

Currently, the Trustees and members would be personally responsible for the Union’s debts if it were to fold, but under this option, members guarantee to pay the nominal sum of £1.

{{ quote “Societies will still be able to do anything they want” – Andy Perkins }}

The change of status will also see the SU change it’s name from ‘University of Warwick Students’ Union’ to ‘Warwick Students’ Union’.

Governance and Finance Officer, Andy Perkins, insisted that the change of status will have little effect on students.

“It all boils down to being a lot more transparent and accountable,” said Perkins.

The biggest changes will be in accountancy, which will have some effect on societies and clubs.

“Societies will still be able to do anything they want, they’ll just have to account for it differently,” said Perkins.

There will be greater scrutiny from the Charity Commission following the change, meaning profits will need to be limited.

Rules already in place regarding profit “will have to be enforced more,” said Perkins. “It’s not about making a profit, it’s about not making too much of a profit.”

For instance a society like Warwick Snow, who might have charged a slightly raised price for spots on their Easter Tour to then fund further competitions, would have to charge a price that solely covers the costs of that tour.

Having a charity number will also make applying for government grants and charity grants easier.

The SU hopes to implement the change by August 1, 2010, but the change will not be possible if the SU is still in negative reserves.

The SU are in negative reserves because of the deficit they have incurred during the Union rebuild, but Perkins said the SU are optimistic they will be in to positive reserves by August. If not, the change will take place in December. It will also take time to transfer the assets and payrolls to the new company.