Last week, we announced that we’re holding a referendum so that our members can vote on whether the Students' Union should become an incorporated organisation. Here we take a deep dive into what it all means and answer some FAQs.
Last week, we announced that we’re holding a referendum so that our members can vote on whether the Students' Union should become an incorporated organisation.
Alongside the Summer Elections, we’ll be asking you to vote on the referendum from 7-9 May where we’ll ask:
Should the Union become an incorporated organisation?
So, what exactly does that mean?
When a charity is set up, a decision must be made as to what sort of legal structure it will have. This structure is defined by its ‘governing document’ (the legal document that creates the charity and says how it should be run). For us, this governing document is our Constitution.
The type of structure chosen affects how the charity will operate, such as:
- who will run it and whether it will have a wider membership
- whether it can enter into contracts or employ staff in its own name
- whether the trustees will be personally liable for what the charity does
There are four main types of charity structure:
- charitable incorporated organisation (CIO)
- charitable company (limited by guarantee)
- unincorporated association
- trust
Currently, we are an unincorporated association which means our trustees (including the sabbatical officers) are personally liable for what we do. Becoming an incorporated charity would help protect our Trustees and make it easier to attract student, external and officer trustees.
It is worth noting that the vast majority (over 90%) of higher education students’ unions are incorporated and this change would make no difference to students or activity of the SU.
Our Constitution allows for the Board of Trustees to annually consider the need for incorporation and if agreed, recommend it to the membership. Our current Trustee Board, which is made up of a majority of students, believes that incorporation is the best option for the future.
To make this change, we require a majority vote from our membership (current RHUL students) so our Trustees want to ask for your support in becoming an incorporated organisation.
What will happen if a Yes vote is successful?
We will authorise the Board of Trustees to:
- Transfer the current Union’s assets and liabilities to a limited liability entity (a business entity that prevents individuals from being liable for the company's financial losses and debt liabilities) established for exclusively charitable purposes with the same or similar objects,
- Dissolve the existing unincorporated association structure at any time following the transfer if it is considered appropriate to do so.
The assets and activity of the Union shall be moved to the new organisation and the Board of Trustees will be tasked with working towards this goal.
FAQs
Is it true to say the Students’ Union and officers will be less accountable to the members if incorporated?
Incorporation will make no difference to the democratic nature and structures within RHSU. These will continue to evolve based on feedback from our membership and best practice across the sector.?
What does incorporation mean?
Incorporating an organisation means giving it a legal body (“corpus” is latin for body). You can incorporate as either a Charitable Incorporated Organisation (CIO) or a Company Limited by Guarantee (CLG).
What is RHSU's current structure?
Currently, RHSU is recognised as an independent organisation, but it does not have a legal form in its own right. Instead, each year the student body elects a group of student individuals who they trust to be responsible for the finances, resources, reputation, and staff of the Union (trustees). This group is supplemented by student and external trustees who also hold these resources in trust on behalf of the student body. Any business or work carried out by the organisation is essentially being done on behalf of those trustees and at their risk.
Will this mean RHSU is no longer a charity and not-for-profit organisation?
RHSU will remain a charity (charity number 1141998) and a not-for-profit organisation. There will be no material changes to our charitable objects.
Does this mean the trustees of RHSU can now take a dividend and benefit personally from any surpluses made?
Our sabbatical officers will continue to be paid as elected representatives and employees of RHSU, who take on the role of representing Royal Holloway students. Our student and external trustees are not remunerated and receive no financial gain in supporting RHSU as a charity. However, they can claim reasonable out-of-pocket expenses in the course of their duties; for example travel expenses for attending Board meetings.
Will incorporation mean RHSU isn’t student-led or focused on making student life better at Royal Holloway?
There will be no material changes to our charitable objects. Our Board will continue to be made up of a majority of Royal Holloway students and focused on delivering our mission of making student life better at Royal Holloway.
Why are you doing this now?
Historically, the Board of Trustees have been minded to continue as an unincorporated association. However, it states in our current continuation that: “The Trustees of the Union, may at any time decide to recommend to the membership the incorporation of the Charity. This should be considered on an annual basis.” (Section 19 of the Constitution).
Although we have insurance in place to mitigate risk, our 12 trustees potentially have unlimited liability for the decisions they make and the operation of the organisation. At present, there are very few students’ unions that are not incorporated or are seeking to do so.
Why does it matter to me?
It is important for students to understand how their SU is being run, how it is governed, and how students influence change. So, knowing the organisation's legal status and having a say on this proposal is important for both our transparency and democracy. Whilst there are not many changes that directly impact students, making sure members understand who we are and what we do is always important.
Will the cost of incorporation divert funds away from student groups?
There will be costs associated with incorporation, alongside the allocation of staff time. However, the professional costs will be approximately 0.003% of our total grant income and commercial revenues. There will be no direct impact on student group funding or our service delivery due to the process of incorporation.
What does it all mean?
In simple terms, we are moving all our staff, assets, contracts, and liabilities from ‘unincorporated entity A’ to ‘incorporated entity B’. We are making no material changes to our staff terms and conditions or our charitable objects.
Incorporation will not directly impact our services to students, however it will give RHSU a legal structure in its own right.
Will incorporation mean less campaigning activity on behalf of students?
Incorporation will not limit our desire or ability to develop officer or student-led campaigns. RHSU will continue to campaign locally, regionally, and nationally in line with guidance issued by the Charity Commission and relevant laws.
Will incorporation affect your relationship with the University?
RHSU will continue to be regulated under the 1994 Education Act but incorporated status would make our position as a separate, autonomous organisation clearer.
Are we the only students’ union doing this?
The SU does not operate in isolation and several other students’ unions have considered their governance in recent years. While this incorporation would be specific to RHSU, good practice from others in the sector has seen nearly all students’ unions make the same move.