Review of the Society's Constitution
At the 2008 Annual General Meeting, it was resolved that:
- A charitable company should be established with equivalent objects to those of the existing Society and such subsidiary powers as may be necessary for its effective governance and management;
- The whole assets, liabilities, staff and undertakings (including current membership rights) of the existing Society should be transferred to that new charitable company with effect from 1 April 2009;
- The existing Society should be wound up following the said transfer, at such time as may be appropriate in the light of any outstanding accounting and other regulatory requirements;
- The existing members of the Society’s Council (insofar as willing to serve) should be the Council members of the new charitable company for their remaining terms of office.
The Society as an unincorporated body transferred the business of the organisation to the Company as a going concern on 31 March 2009.
The Memorandum and Articles of Association of The Architectural Heritage Society of Scotland can be downloaded in the right hand column.
Report from 2008 AGM papers regarding the change in status
For some time, Council has been considering the conversion of the Society into a charitable company, with the advice and support of the Society’s solicitors, Messrs Lindsays. The main reason for this has been the protection of Council members and others involved in the Society’s governance from personal liability, in the event of the Society being wound up on insolvency or having a successful legal claim made against it which the funds of the Society could not meet. We have clear legal advice that these individuals are not adequately protected against such personal risks at present (there being no current limit on the liability they could be exposed to), and in the light of this Council would recommend strongly that the Meeting approve this course of action.
Draft Memorandum and Articles of Association have been prepared in consultation with Lindsays and are now generally in a form acceptable to Council and to OSCR. OSCR also confirms that the existing Society could be wound up on the transfer of its assets, liabilities, staff and undertakings to the new company.
Basically, the Memorandum and Articles aim to incorporate the Society’s existing constitution into a format recommended for charitable companies by Lindsays, reflecting what would now be regarded as good practice in key areas of governance. The Memorandum of Association, in particular, includes subsidiary powers (such as co-operating with other bodies, raising funds, borrowing, lending, donating and employing staff) which may be exercised in support of the Society’s main objects, set out in considerably greater detail than in the existing Constitution. It also makes clear that the liability of individual members will not exceed £1 each, a fundamental reason for seeking to change the Society’s existing status.
The Articles of Association contain the primary rules for the company’s governance, working on the Society’s existing Constitution to make provision (as recommended by Lindsays) which better reflects current good practice. These do not fundamentally affect the existing rights of members, and it is intended that all current membership rights would transfer to the new company. The draft Memorandum and Articles are available to any member of the Society on request, from the National Office.
On the question of timing, the Treasurer (having consulted the auditors) recommends that the new company should take over the existing Society’s operations with effect from 1 April 2009, the transfer taking place on 31 March. This should allow plenty of time to prepare for the practical aspects of transfer, assuming this Meeting is prepared to approve it.
To avoid unnecessary upheaval, Council suggests that all Council members of the existing Society with extant terms at the time of the transfer should become directors of the new company (they would still in fact be called Council members), for the remainder of their existing terms, insofar as they are willing to remain in office. In other words, a Council member reaching the end of the three year term for which they were originally elected would be eligible for election for a further three year term, while a member who had served for the full six years would demit office. This would not conflict with the relevant provisions of the Memorandum and Articles.
Finally, there will undoubtedly be a continuing need to review more detailed aspects of the Society’s governance and management, if only to satisfy OSCR that adequate arrangements in place. In particular, the relationship between the national Society and its local groups needs to be reviewed and formalised. Members will be kept advised of this process as required.