Obetto v Charity Commission for England and Wales -[2025] UKFTT 1395 (GRC)- (25 November 2025)

Key Facts

Issues

• The Tribunal had to determine if the dissolution of the incorporated charitable company on 14 February 2012 under the Companies Act 2006 meant the charity ceased to exist as a matter of law, triggering mandatory removal from the Register under section 34(1)(b) of the Charities Act 2011.
• The issue centered on whether the Trustees, including the Appellant, neglected their duty under section 35(3) of the Charities Act 2011 to inform the Respondent of the company's dissolution at Companies House in 2012, thereby failing to seek guidance on converting to an unincorporated charity.
• The Appellant argued the Respondent's 10-year delay in identifying the dissolution and removing the charity was unfair and discriminatory, contrasting it with the Hipkiss v Charity Commission case where the Respondent provided an opportunity to respond before removal.

Holdings

• The Tribunal rejected the Appellant's argument that the Commission's acceptance of annual returns implied continued recognition of the charity. The legal requirement for proper procedures (e.g., converting to a CIO) was not followed, rendering the charity's continued operation invalid.
• The decision to remove the charity from the Register was lawful. The Tribunal emphasized that a new unincorporated charity must apply separately for registration if it wishes to retain charitable status, as the dissolved entity could not continue under the same charity number.
• Section 34(1) of the Charities Act 2011 mandates that the Commission must remove any charity that ceases to exist from the Register. The Tribunal confirmed this duty applies regardless of proportionality or fairness considerations, as the charity's existence is a factual determination.
• The Tribunal determined that the incorporated charitable company ceased to exist as a legal entity upon its dissolution on 14 February 2012 under sections 1003 and 1012 of the Companies Act 2006. A dissolved incorporated charity loses legal status and cannot operate as a charity. The Commission was legally obligated to remove it from the Register.
• The Tribunal found that the trustees, including the Appellant, failed to notify the Commission of the company's dissolution as required by section 35(3) of the Act. This failure led to the charity being operated without legal status, as the dissolved company could not act as a charity.

Remedies

Legal Principles

• The Tribunal emphasized that the legal existence of an incorporated charity is determined by its corporate status. Once the company was dissolved on 14 February 2012, the charity ceased to exist as a legal entity, necessitating its removal from the Register under section 34(1)(b) of the Charities Act 2011.
• The Tribunal found that the trustees, including the Appellant, had a statutory duty under section 35(3) to inform the Charity Commission of the dissolution of the incorporated company. Their failure to do so constituted a breach of fiduciary duty, as they did not proactively seek guidance or fulfill their obligation to update the Commission on the charity's status.

Precedent Name

Cited Statute

• Charities Act 2011
• Companies Act 2006

Judge Name

• Elizabeth
• Dwyer
• McMahon

Passage Text

• The Tribunal concluded that the incorporated charitable company ceased to exist as a legal entity upon its dissolution on 14 February 2012, in accordance with sections 1003 and 1012 of the Companies Act 2006.
• The Tribunal rejected the Appellant's argument that the Respondent's 10-year delay in acting was unfair, stating the Respondent's decision was not discretionary and must remove charities that cease to exist.
• The Tribunal emphasized that trustees are legally required to notify the Respondent of a charity's dissolution under Section 35(3) of the Act and that failure to do so left the Respondent without the resources to proactively reconcile records.