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In the current climate one of the matters we are asked to advise is the merger of charitable organisations or on the closure of a charity. Funding stress and uncertainty is becoming a factor in the viability and sustainability for some sectors.

All charity trustees – board of directors, management committee (by whatever name they are called) - have a duty to consider whether a merger with another organisation would be in the best interests of their charity.
This should be considered on a regular basis. Similarly the trustees need to know the financial situation and take early steps to consider their options if the charity is under financial stress. Sometimes a merger can be a solution to this issue.

At Edwards & Co. we have a lot of experience of dealing with mergers and closures. Jenny Ebbage, our Head of Charities, has particular expertise having dealt with mergers for charities such as Action Mental Health, Inspire Wellbeing, Bryson Charitable Group, Age NI, Volunteer Now, Fermanagh Community Transport and housing associations and is currently working on a number of mergers in the sector. We also have experience of closures whether under stress or because the charity is no longer needed.

There are particular legal issues involved in mergers and subsequent closures of the merged entities. For example, it is particularly important to consider how this will affect legacies and to ensure the trustees of all charities concerned carry out their duties properly.

The Charity Commission for Northern Ireland has produced guidance setting out the charity law requirements for charities considering a merger or facing a closure.

If your charity is considering a merger or closure please read the guidance and seek legal advice at an early stage. Contact Jenny Ebbage who is happy to help.

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