By doing everything within your power to act properly and appropriately there will be no negative impact on you – either personally or professionally, but dither, be indecisive or delay a tough decision and the effects could be huge.
The effects on anyone running a charity or not for profit organisation when it gets into financial difficulty are:
- Increased worry and pressure, which often can affect your normal day job or your personal life
- Increased focus on fulfilling the charitable/not-for-profit objectives, whereas this now needs to be secondary to survival or taking appropriate action
- Increased risk of personal liability in an incorporated organisation; or an increase in the extent of personal liability
- Increased risk of a creditor taking action against the organisation and/or its assets reducing your ability to ‘rescue’ the organisation and maximise the return for all concerned
- Increased chance of facing director disqualification proceedings
These can all be relieved by letting Lucas Ross take the strain. Contacting us will allow you to be quickly reassured about your position and that of the charity. Contacting us is without obligation or committed cost, so please call today.
Taking the decision to restructure your organisation, close the doors or enter into a formal insolvency process will not:
- Result in you being automatically barred from being a trustee of another charity
- Result in you being automatically barred from being a company director
- Impact on your personal credit file
- Result in personal liability unless
- Your organisation is unincorporated
- You have given a personal guarantee
- You have breached the trust principles surrounding your charity and its income, even then this is a complex area and further guidance will be needed
- Result in you becoming personally bankrupt
Being a trustee of a charity or not for profit organisation that has failed can be emotionally difficult as you wrangle with the feelings you have towards to great cause(s) you worked for and all the stakeholders connected to your business.
Imagining yourself as the trustee who has had to take the difficult decision to close will make you uncomfortable. But imagine yourself as the same trustee having delayed the decision to seek advice about your insolvent charity leading to the position being much worse? Not only would you face the pressure of knowing creditors were worse off, but imagine the potential press or PR backlash from your actions? This is especially relevant if you are a high profile figure or involved in a number of charities?
We have worked with several high profile charity trustees – from members of parliament, professionals (chartered accountants and solicitors), people who have received MBE’s and even members of the clergy. Being a trustee carries enormous responsibility and attracts people from all walks of life. We know from experience that your charity may attract some negative publicity by going into liquidation, administration or even a voluntary arrangement; but we also know that you will attract negative publicity if you did not take appropriate action at the appropriate time. Consulting us early is essential to extinguish or mitigate this risk. Call today on 0330 128 9489 and speak to Kevin Lucas in complete confidence.