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Carrying out closure checklist

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Use this page as a checklist of issues to consider and actions to take when closing. This includes a summary of the issue, recommended practices and links to further information.

This page is about carrying out closure of registered charities but the information outlined will apply to organisations of all forms. Every organisation is different and how you close will be affected by your size and types of activities.  

Some of these topics may not apply to your organisation. This checklist wont include everything and you may have additional duties. You should always seek specialist advice relevant to your legal form.

If you think you need legal advice, see our guidance and links to providers, including pro bono services.

Closure checklist

If your organisation is registered with any regulator or statutory register

If your organisation has restricted funding

If your organisation is currently fundraising

If your organisation employs staff

If your organisation involve volunteers

If your organisation has contractual liabilities

If your organisation has physical assets  

If your organisation owns land and property

If your organisation has waste  

If your organisation has intellectual property

If your organisation holds data

If your organisation has a permanent endowment

If your organisation has safeguarding duties to children or adults at risk

If your organisation delivers services to people at risk of harm

If your organisation has a website and social media presence  

If your organisation has insurance

If you are registered with any regulator or statutory register 

Registered charities must inform the Charity Commission so they can be removed from the Register of Charities. How you notify the Charity Commission will depend on your turnover and status. 

Where your organisation is also constituted as a company, then Companies House will also need to be informed. You must make sure your charity is removed from the Companies House register before it can be removed from the register of charities.

Learn more:

You may also need to inform other regulators including: 

  • If registered with the Fundraising Regulator, you will need to email  registrations@fundraisingregulator.org.uk asking be removed from their register. 
  • HMRC - Her Majesty's Revenue and Customs will need to know of your plans for closure and that you have ceased trading; especially when you employ staff.
  • The ICO - every organisation which processes personal information needs to pay a data protection fee to the Information Commissioner’s Office, unless they are exempt. Contact them explaining that you wish to deregister. You will need to be able to explain how the information held by the closed organisation will now be held and who will be responsible. For example, has the information been transferred to another organisation.
  • If you are a registered charity elsewhere in the UK, you may need to inform the Scottish Charity Regulator (OSCR) and the Charity Commission for Northern Ireland.
  • If you deliver any regulated services - such as health and social care or offering money and debt advice - you will likely need to inform that specific sector regulator.  

If you have restricted funding 

If a donor has given funding that outlines how that should be spent, you can only spend it for that purpose. Proactively contact these donors about the status of any current grants or contracts. If you are reliant on their continued use during the closure period or it’s contribution to your general funds, you may need to renegotiate their use. 

You could discuss moving the activity to another like-minded charity to continue delivery of that activity. In either case, if the donor will not allow the funding to be used differently than intended, you may need to return the funds.

Learn more about restricted:

If you are currently fundraising

You should be very cautious of running any live fundraising appeals if you know you will close. You should be open and clear with donors on the use of the funds and the wider context of the organisation. 

Sometimes new donors may approach you about supporting you to continue activity. You may need to consider whether to refuse a donation. Trustees must only do so if to accept it would be harmful to the charity being able to achieve its objectives than rejecting it. Registered charities should consider discussing this with the Charity Commission. 

Where you are running an appeal which will fail due to the closure, where donors can be identified, the money must generally be returned. Unless they have agreed their money may be used for another purpose. 

Learn more about:

If you employ staff 

Redundancy 

There are legal rules which must be followed if you are making staff redundant. If an employer is proposing to make redundant 20 or more employees at one establishment within 90 days, you must follow ‘collective consultation’ rules. 

Regardless of the situation, you must give employees at least the statutory notice period based on how long they've worked for you. However, your employment contracts might include a longer notice period.

You must allow staff a reasonable amount of time off to look for another job or to do training if they've worked for 2 full years (including the notice period). This may affect your capacity for them to carry out your closure plan. 

Informing HMRC

You must inform HMRC immediately if you are closing. You will need to to submit a final payroll return and make sure all expenses and benefits have been completed. 

Transferring employment

It may be possible for staff to transfer to another charity. For example, with agreement of a funder, a grant and the staff paid from this funding could be delivered by a like-minded organisation. 

This will allow the activity to continue and maintain the individual's employment . There are legal rules, commonly known as TUPE, which ensures continuity of service and that the terms and conditions of employment of transferring employees are maintained.

There are particular rules which apply where the employer is insolvent which aim to help prevent job losses. In these situations, employment rights and liabilities do not transfer under TUPE. Neither are employees protected against a dismissal that is connected with the transfer.  

Pensions

All employed must auto-enroll ‘eligible employees’ into a pension scheme. The situation can vary if your organisation is insolvent, if you have a defined benefit scheme or a trust-based scheme. Always seek additional advice from your pension provider. 

Most commonly individuals are enrolled in a defined contribution pension. This is where their retirement income depends on how much money contributed to it and the performance of those investments.

This money is held by a provider and you will need to make contact with them to stop your organisation's contributions and provide information to relevant members of the scheme. 

Consider future referees 

While there is no legal obligation to provide a reference for an employee, the closure of the organisation may cause inconvenience for your staff as they take on new roles. 

You may consider issuing a standard letter per staff member. Any open letter (“To Whom It May Concern”) should be brief with factual information confirming:

  • dates of employment
  • their job title
  • date of closure of the organisation.

Many staff may consider acting as a professional referee for a former colleague. However, they must be cautious not to share confidential information previously held by the charity. 

For example, whilst a former CEO may choose to offer their own professional reference for a former staff member; your organisation should not aid or authorise sharing of confidential information - such as about health, disciplinary processes or safeguarding issues - by it’s former staff. See below for more on what to do with data that the charity holds.

Assets in staff possession

The assets that staff have of the organisations - such as laptops - remain property of the charity. You should be very cautious of disposing of a charity's assets in any way which may be seen as unethical. You should  make sure all assets of the organisation are returned and disposed of before closure. 

If you involve volunteers 

Volunteers will be a key group to keep informed and involved throughout the closure process. You can seek their ideas and feedback about the closure process. Be honest about any changes to volunteering and ask volunteers to be flexible about the tasks they may undertake. 

You may need to consider whether you have capacity for your current volunteering programme when closing. Remember that volunteers need specific communication and support. You may need to reduce the opportunities early in the closure process if you become unable to offer safe and supportive placements. 

In many organisations, volunteers have a connection to the organisation - and a history of engagement - which is quite different than that of staff. You will need to be sensitive to how volunteers are informed and engaged during the closure. 

For some volunteers, your organisation may play an important part of their social lives and connection with others. They may experience feelings of fear and loss from the closure. 

The organisation may be a key provider of care and support for them either formally or informally. You should actively consider whether any volunteer may be made vulnerable by the closure of the organisation and if so how to support the transition.

This may include other volunteers offering further peer support and considering other organisations able to support them going forward. 

Volunteer Centres are local organisations that provide support and expertise within the local community, to potential volunteers, existing volunteers and organisations that involve volunteers. You may want to approach your local volunteer centre to help your current volunteers find new volunteering opportunities. 

If you have contractual liabilities

You should review all contractual liabilities which the organisation currently has and consider the specific terms. Check for any penalties for early termination; break clauses; dates or notice periods and wider process for cancellation. 

Issues to consider include:

  • property leases and rental agreement
  • rental of equipment like telephones
  • servers or photocopiers
  • ongoing services like cleaning
  • waste disposal
  • water treatment
  • PAT testing. 

Always speak to the service provider. Many organisations may have standard terms issued to all organisations but be willing to be more flexible for charities and voluntary organisations which are closing. Explain your circumstances and be proactive in seeking exemption. 

Always explain that trustees are volunteers and are not like directors of a company with a personal benefit. If they are willing to be more flexible and offer any cost savings; always seek confirmation of this in writing.

If you have physical assets  

There are rules which you must follow to transfer any assets belonging to the organisation. If you have one, check your asset register and consider what is owned by the organisation which may need to be disposed of. Things to consider include:

  • computer hardware and software
  • furniture and fixtures
  • any machinery
  • office equipment such as photocopiers
  • laminators and vehicles.

You should consider your governing documents - such as your constitution - and your legal form. You may need to formally agree any transfer at a meeting and in some cases seek Charity Commission authorisation. If you are producing a final set of accounts, you may need to include details of the transfers. 

If you own land and property

The legal requirements on your organisation of selling, leasing or transferring land and property  depends on your legal form, the circumstances by which you had got hold of the land or property and the requirements in your governing documents. 

Specific rules can govern when you sell land and property for less than market rate and when you sell to someone connected to your charity. You should always seek specialist advice and guidance. 

If you have waste  

For assets which you do not transfer, you will be responsible for their disposal. As a non-household setting you may have specific responsibilities for disposal of waste; including under the Waste Electrical and Electronic Equipment (WEEE) Regulations and the Waste duty of care: Code of practice. 

This may include needing to complete a waste transfer note for each load of waste that leaves your premises. With extra responsibilities if you’re dealing with hazardous waste. This can include situations where your organisation receives used electrical and electronic equipment but the item is unsuitable for reuse and you intend to remove it. 

You should seek advice from your local authority or the Environment Agency about the disposal of your waste. 

Any organisation should be especially cautious of disposing any identifiable or reusable items - for example empty letterheads or branded uniforms. These could be used by criminals to help them commit fraud or impersonate your organisation. Always dispose of these items so they are put beyond use. 

If you have intellectual property

Your organisation may hold or own a wide range of intellectual property. Intellectual property is creations recorded in a permanent format (such as text, software, graphics, drawings, music, designs and trademarks). Typically organisations hold intellectual property which they have produced or used through their work.

Under charity law, intellectual property rights are charitable assets that should be managed, protected and the value maximised - just like other financial or physical property. Trustees are as responsible for intellectual property as they are for cash in the bank or laptops in the office. 

If you close the organisation, you will need to demonstrate appropriate disposal in line with the governing document. For example, this may mean:  

  • transferring the IP to a third party that will continue to use it for your closed charity’s purposes or 
  • selling the IP and using the proceeds to further your closed charity’s purposes.

Copyright, patents, designs and trademarks are all types of intellectual property. You get some types of intellectual property protection automatically; other types of protection you need to apply for. Some organisations may also have valued their intellectual property in their annual accounts and will need to account for the loss of this value when they close. 

Ownership of intellectual property

It is important to remember that just because your organisation holds intellectual property (IP), does not mean it is the owner. 

Usually, IP created by an employee on your payroll will automatically be owned by the employer organisation. The same is not true for IP created by third parties (such as freelancers or service providers) even if your organisation paid for it. To own this IP, there needs to have been a legal assignment of the rights (usually via a contract). 

There can be issues with any IP produced by volunteers - as they are not employees on your payroll and often have no contract with your organisation. If volunteers are creating valuable IP, they need to formally assign these IP rights to your organisation under an agreement. 

If you do not own all of the IP you hold, you may still have rights to use that IP (often called a 'licence'). These rights may continue after closing your organisation if you are able to transfer them to a third party. If you are unsure about the IP your organisation owns, it is worth doing an IP audit as part of the closure process.

Transferring intellectual property 

Before closing, you may transfer to another organisation the IP you own (for example, trademarks, patent, copyright). This transfer will typically be either:

  • an arm’s length sale (for a commercial fee)
  • or a transfer where the recipient agrees to hold and use the IP for your organisation’s purposes (or purposes within your organisation’s purposes).

To make this transfer happen, you will need an IP assignment agreement which details the transfer of intellectual property rights to any recipient, where both the old and new organisation have clarity on their rights and remedies. 

For example, you may specify that the IP can only be used for your organisation’s charitable purposes or non-profit purposes. This transfer of IP sometimes exists in a wider transfer agreement that transfers other rights and liabilities (for example, funding commitments, staff or contracts).

Existing grant agreements or contracts 

Existing grant agreements or contracts which are still attached to your organisation may include specific requirements around IP. For example, your organisation may have assigned the ownership of any materials produced under that grant to a funder/third party.  

Alternatively, your organisation may own the IP but may need to seek a funder/third party’s agreement if it is transferred to another organisation. It is important to check the IP clauses in existing grant agreements and contracts to see if these affect how you deal with the rights on closure.  

If you hold data

Individuals have the right to have personal data removed where the personal data is no longer necessary for the purpose it was originally collected or processed it for.

If you control or process data about people you are required under the Data Protection Act 2018 to return or delete all personal data after the end of services, or on expiry of a contract or agreement, unless it’s necessary to retain the data by law.

You also have responsibilities for telling other organisations to delete any links to copies of that data, as well as the copies themselves.

You should have a clear plan and record of how you have complied with your legal obligations. If you are unsure you can contact the Information Commissioner’s Office for advice. Remember, trustees or the management committee will still be liable for their data protection duties even after the organisation has closed. 

More widely, computer hard drives should be cleaned or reformatted so that the documentation relating to the organisation is no longer available. All identifiable information about your work should also be destroyed so that they can not be accessed by those who could impersonate your organisation. 

If you have a permanent endowment 

Some charities will have a ‘permanent endowment’ - this is money or property that was originally meant to be held by a charity forever with conditions on how it can be used. Usually charities will receive income from this investment or rent from the property/land. The law allows charities to spend permanent endowment in certain circumstances but you may need to get permission from the Charity Commission.

Read the Charity Commission’s guidance on:

If you have safeguarding duties to children or adults at risk 

If your organisation works with children or adults at risk, you should have safeguarding policies and procedures that all trustees, staff and volunteers must follow. When you are closing you should consider how you meet these safeguarding responsibilities. 

If you have any safeguarding concerns you should act before you close. This includes where:

  • you have a current concern about child or adult at risk of harm
  • you are currently assisting statutory services in responding to a known concern about a child or adult at risk of harm
  • an allegation made against a member of your team and you are currently assisting statutory services in responding
  • you are undertaking any internal investigation about a concern or an allegation against a member of your team. Especially if you deliver regulated services and may have a legal duty to refer the individual to the Disclosure and Barring Service. 

In these circumstances, you should discuss with your local authority statutory child protection or adult safeguarding services about your upcoming closure and make sure a plan is in place to transfer information as necessary. 

If you have details of non-recent safeguarding cases you may also want to discuss with your relevant local authority statutory child protection or adult safeguarding services what should happen to this data. You may need to consider making sure that data is retained securely after your closure. 

Read our guidance:

If you deliver services to people at risk of harm 

Depending on the nature of your activities, the closure of your organisation may create new risks for people you organisation supports or gaps in provision in your community. This is especially important if you deliver care and support services which help prevent harm or protect people from harm. 

Your closure may create new demands on other services, including on statutory services. Actively communicate with other local service providers about your upcoming closure. Think widely about all other organisations which may be impacted. 

If you currently accept referrals or other organisations signpost individuals to your services, make sure they are aware of your upcoming closure and that you are no longer accepting requests for services. 

If you work closely with education, health or statutory protection services, always give them early notice of your closure and consider any need for wider transition planning.

You may want to consider:

  • transferring activities or services to a new provider.
  • sharing information about your service users to another provider. This may require an information sharing agreement and consent of each individual for whom you are sharing the information.  
  • working with higher-risk service users to develop an individual transition plan.
  • discussing with your funders how they can support other providers. 

If you have a website and social media presence  

Your website and social media accounts are assets of the organisation and need as careful closure as any other. You may need the website and social media accounts to share information while you are closing. 

You should decide whether you want to retain the site or accounts as a legacy of the organisation activities or whether you wish to close them completely. You should avoid just cancelling all services but plan a clear closure for the site and each platform. 

Depending on your digital activities, you should consider: 

  • Email: Whether you will close all email addresses or forward some to new addresses.
  • Content: Updating the website and social media accounts with details of your forthcoming closure with a timeline.
  • Turn off any data collection forms like newsletter subscriptions or referral forms: This avoids you collecting data you will not need or do not have a purpose for. 
  • Turn off any search term adverts or boosting and paid for social media advertising: There's no reason to stimulate visitors to your site. 
  • Back up the website: Ensure there is a saved hard copy of all site files. 
  • Close down the website in order: If you are keeping any information as a legacy, ensure that there is a clear statement that the organisation is closed and when information was last updated. It is good practice to change the home page explaining that the organisation has closed. If you use a plugin or widget these should be disabled - without updating they risk being hacked in time. 
  • Terminate any services: If you are taking down the site completely, you may be able to cancel all services. However, if you want to keep some website presence (at least for a few years) you may need to prepay for this. You may no longer need all services and may seek to negotiate to go onto a basic package. 
  • Decide what to do with your domain: Your website URL is a registered address. These will lapse unless you take action. If you are leaving a legacy site you may need to prepay for its use in advance. If you cancel the domain, any other individual or organisation will be able to buy this domain. This can cause risks of others impersonating your now-closed organisation. 
  • Final message: Add a final message to all social media accounts or decide to remove the accounts completely. 

If your organisation has insurance 

Many organisations will have a range of insurance cover that helps to manage risk. You will need to take action to ensure that you have the right protection for any potential liabilities as you close. 

Remember, insurance cover can vary between provider, your individual policy and the legal form of your organisation. This guidance is introductory only. It is essential you discuss your situation with your insurance provider and always get specialist advice relevant to your organisation.

What type of insurance cover you have previously held will affect whether it will cover claims made after you close. As a general rule, insurance policies come in two types. For each insurance policy you hold you should check whether it is: 

  • A ‘claims occurring’ basis cover: The insurer will consider claims of loss or damage which arise out of incidents which occurred during the period in which the relevant insurance policy was held by the organisation. In this instance, the insurer may accept claims made after the closure of the legal entity and the policy has ended.
  • A ‘claims made’ basis cover: The insurer will consider claims of loss or damage for incidents which occurred during the period the relevant insurance policy was held by the organisation but not once the policy period is over. In this instance, the insurer will not accept claims made after the end of the policy.

If you have held a ‘claims made’ basis cover, you may need to consider purchasing a new ‘run-off’ policy. This is insurance cover taken out when an organisation is due to close and would offer protection for claims relating to alleged historical issues. 

For example, if someone were to allege that they suffered harm due to the work of the organisation but this only came to light after the organisation has closed; the ‘run-off’ cover may protect those previously engaged in the organisation from this liability.

It will be especially important if your organisation delivered regulated services like health and social care or financial advice. 

As the risk of a claim reduces the longer the organisation has been closed; it is usually lower cost than your usual premiums and may reduce further over time. You may need to consider ‘run-off’ coverage for a number of years depending on the activities your organisation delivered.

For either type of insurance any claim will need to meet the policy terms and conditions and should be reported to the insurer in line with their claims reporting conditions. These terms may include duties on you to provide information about your activities or the circumstances leading to the incident. Failure to meet these terms may invalidate the policy.

Other issues to consider: 

  • Stay legal: It is a legal requirement for any organisation which employs staff or operates vehicles on public roads to hold relevant insurance. You must keep these policies in place up to the very end of all activities and closure of your organisation. 
  • Inform your provider: When the decision to close has been made you should confirm with your provider when you are due to cease activities and when the legal entity will formally close.
  • Identify who will be a contact for your provider: Your insurer will likely want to know who to be able to contact should there be any issues arising after the closure of the organisation. This individual may require access to documentation relevant to that insurance policy (for example, records about vehicles if you had motor insurance, HR records if you had employee insurance). 
  • Stay risk aware: Your insurance policy will be specific to your organisation, its work and what you informed the insurer about how you manage risk when you took out the policy. As you wind-down your activities, you should make sure that you maintain these risk management processes; especially for issues like health and safety and security. If you have staff leaving or skills gaps, you must still meet the terms required by your insurance policy. If any property is to become unoccupied whilst selling the assets, your insurers should be notified as cover restrictions and conditions are likely to apply and you may need to change any security requirements.
  • Be transparent if taking out new insurance or changing any policy: Anyone taking out insurance has a legal requirement to make a ‘fair presentation of the risk’ to insurers. You should inform your insurer if you know you are actively considering closure or have decided to close when taking out new cover, renewing existing policies or making variations to a current policy. You should be transparent about the process of closure and any changes to how you will manage risks during this period. 
  • Manage any existing or known issues: You may have some pending or outstanding claims when you decide to close. Providing that the claim met the initial policy wording requirement then it will still be considered by your insurer should an organisation cease to exist. However, the insurer may require a contact to manage the claim and access to relevant documentation. You may wish to consider settling all claims before closure; even if this exceeds what your insurance will cover. Always seek relevant professional advice in these situations. 

Matters are more complex if your organisation is entering administration or insolvency and you should seek professional advice. 

Much can depend on whether the relevant insurance cover has been purchased before becoming insolvent and whether there are assets which could cover any excess charges. Legal changes in 2016 made it easier for a third party to make claims directly against insurers without having to restore an insolvent company.

Learn more: 

Page last edited Oct 13, 2020

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