Establishing and registering a charity in the Isle of Man
This page includes information and guidance on establishing a charity on the Island, including model governing instruments, guidance as to the role of a charity trustee, information for foreign charities seeking to register here (including eligibility) and guidance as to the registration process, including the registration application form available on the Publications page.
What is a charity?
A charity is an organisation which is established for purposes which are wholly charitable, i.e. they fall within any of the description of purposes set out in section 6(1) of the Charities Registration and Regulation Act 2019 and they are for the public benefit.
For more information, see the Guidance on establishing a charity which is available on the Publications page.
Why start a charity?
There are many good reasons for starting a new charity. There may be social needs which are not being met by government agencies or other welfare organisations or charities. New charities can be flexible enough to help local and minority needs, and can often get help to where it is needed very quickly. The creation of smaller charities can often encourage more people to become involved with charities because people are more likely to help a small, local organisation that is being run by friends than a larger organisation, which can seem impersonal and appear to have all the help that it needs.
If you want to do voluntary work, or help a particular cause, it is a good first step to see if there is already a charity that is doing what you want to do, and offering to help them. If you want to provide a service that no other charity provides, it may still be worthwhile approaching established charities to see if they would like to provide that service with your help – it may be something that an established charity would like to do and, indeed, could do, if it had the available people to do it.
Many people start charities because they wish to commemorate family members or friends. While many of these charities thrive and continue, others eventually fade away because the underlying reason for starting the charity was a need for the therapeutic benefits of doing so, namely to help cope with the loss of a loved one. In these cases, once the grieving and healing process has been worked through, people lose interest in the charity and it is no longer feasible for it to continue. Often, a lasting memorial can best be created through co-operation with an existing charity, for example by the creation of a named fund or by the purchase of assets for the charity in the name of the loved one.
Setting up a charity involves a lot of administrative work and organisation, and needs several people to share the work if the charity is going to be set up and run successfully. See the Guidance on establishing a charity and the information on the Running a charity – ongoing requirements page.
What steps have to be taken in order to set up a charity?
There are a number of decisions which have to be made before establishing a charity, as follows:
- Which charitable purpose(s) is it intended to achieve, who is to be assisted and by what means and where will the charity carry out its activities?
- What type of legal structure will the charity have, e.g. will it be a trust, an unincorporated association, a company or another type of corporate body?
- What name will the charity have? Will it also use other names?
- What skills, experience and/or interests will the charity trustees need to have (including administrative/recordkeeping and bookkeeping experience) and are there sufficient individuals likely to be available? NB The trustees of a charity do not each have to have all the necessary skills, etc, but they should be present within the trustee body as a whole or they should be available within the charity for the trustees to call upon.
More information about these issues can be found in the Guidance on establishing a charity and the Guidance as to the role of a charity trustee, both of which are available on the Publications page.
Before deciding on the preferred legal structure, it is important to be aware of the legal framework which governs it. This is particularly so with corporate structures, e.g. charitable companies, which are governed by the legislation under which they are established as well as charity law. It is recommended that professional advice be taken before deciding to use a corporate structure.
It will be necessary to prepare a governing instrument for the charity, either using a model which is appropriate given the charity’s legal nature or by seeking the assistance of a suitable professional, including drafting the charity’s objects. The governing instrument must provide for those matters set out in Regulation 8 of the Charities Regulations 2020. For more information, see the Guidance on using the model governing instruments which is available on the Publications page. The charity is established by signing the governing instrument and (where appropriate) following the statutory process.
Registering a charity in the Isle of Man
Before a charity can carry out any activities in the Isle of Man, it must be registered here unless it is exempt from the requirement to register. Otherwise, the charity may be in breach of section 10 of the Charities Registration and Regulation Act 2019, which is an offence with a maximum penalty (if tried on information) of 2 years custody and/or an unlimited fine or (if tried summarily) 6 months custody and/or a fine of £10,000. If an offence is committed by the charity, the charity trustees may also be liable.
Section 8 of the 2019 Act also provides that it is an offence for an institution, in the Isle of Man, to take or use any name, style, title or description implying or otherwise to pretend that it is a charity or to hold itself out as charity unless it is a registered charity, or one which is exempt from the requirement to register. The penalties are the same as those for a breach of section 10.
For an institution to register as a charity here, it must meet the legal requirements for being a charity and also have a substantial and genuine connection with the Isle of Man, per section 12(1)(a)(i). Further information can be found in the Note published by the Attorney General on the requirement for a substantial and genuine connection with the Isle of Man.
The registration process is begun by completing the registration application form available on the Publications page and sending, or delivering it to Charities Administration. For more information on the registration process, and the matters which have to be considered by the Attorney General in approving, or refusing, a registration application, see the Guidance on making an application to register a charity available on the Publications page.
If the Attorney General approves the application for registration, the charity will be issued with a certificate of registration and details of it will be entered on the register of charities. With certain exceptions, these details will be available to the public.
If the Attorney General refuses the application, this would be notified in writing with a statement of reasons. There is a right to appeal against such a decision to the Charities Tribunal in accordance with the Charities Tribunals Rules 2020.
Additional information for foreign charities
A foreign charity is one which is established under the laws of a country or territory outside the Island.
In order for a foreign charity to register in the Isle of Man, it must be established for purposes which are charitable under Manx law and be able to demonstrate a substantial and genuine connection with the Island.
If the foreign charity is a body corporate, it is likely to have to register under the Foreign Companies Act 2014. Please be aware that, for the purposes of that Act “foreign company” is defined in section 4 as “a person which has legal personality but is not an individual and is incorporated under the laws of a jurisdiction outside the Island”. This means that bodies corporate which would not usually be considered to be companies are caught by the requirement. Further information concerning registration under the 2014 Act can be obtained from the Companies Registry.
Unless at least one of the charity trustees is ordinarily resident in the Island, a foreign charity is required to appoint a “responsible person” who is resident here and who is then responsible for retaining the records, etc of the charity concerning its activities in the Island and ensuring its compliance with the statutory requirements, per section 41 of the Charities Registration and Regulation Act 2019.
In the case of a foreign charity, the requirement to file annual accounts and reports under Part 7 of the 2019 Act is to file accounts and reports in relation to its activities carried on by it in, or otherwise connected with, the Island. This means that it is not enough to file the charity’s “global” accounts and reports unless they clearly and separately set out the necessary information concerning the charity’s activities in the Island.
Attorney General’s Chambers
Isle of Man
Telephone:+44 1624 687318
Email: Send Email
Date of publication: May 2021