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The outgoing trustees and the new trustees have to execute a deed of appointment and retirement to appoint any new trustees.
There are two distinct drawbacks of the trust arrangement:
Firstly, the trust/charity does not have its own legal identity. It is not a recognisable object or person in its own right. This means that the charity trustees are personally liable for any debts incurred by the charity which the charity is unable to meet from its own resources. While they may not appear to be a signi cant issue for individuals who have taken a vow of poverty, it can be more of an issue for lay trustees who would not want to risk the possibility of becoming bankrupt
Secondly, the trust/charity cannot hold property such as land or investments in its own name. All property therefore has to be held in the name of
the individual trustees. As a result, every time the trustees change it is necessary to update any relevant registrations (e.g. at the Land Registry)
WHAT IS A "PART 12" INCORPORATED BODY?
Many religious institutes have in the past, applied to the Charity Commission for a “certi cate of incorporation” of their trustee body. Essentially this means that the trustees of the charitable trust are able to act as a corporate body in their own right, usually with a seal that is used for executing documents. If the trustees have been recognised as a corporate body in this way then:
Any property which belongs to the charity can be registered in the name of the corporate body, so that future changes in trustees do not need to be updated on the title registrations
The trustees can sue and be sued, and enter into contracts in the name of the corporate body by applying the seal, which does not require all trustees to be present; and
When trustees change it may not be necessary to actually complete deeds of appointment and retirement, depending upon how the certi cate of incorporation is worded
However, it is important to understand that this is essentially just an administrative simpli cation. It does not provide the individual trustees with any form of limited liability protection.
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