Charity Insolvency and Dissolution Solicitors

Supporting charities through financial difficulty, insolvency and dissolution with clear advice focused on protecting the organisation, its creditors and those responsible for its governance.

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Financial difficulties can develop for many reasons, from falling income and rising operating costs to the loss of significant funding. Where a charity is struggling to meet its financial commitments or considering whether it can continue operating, taking advice early can help trustees understand the options available and make informed decisions about the organisation’s future.

DTM Legal advises charities, charitable companies, Charitable Incorporated Organisations (CIOs), trusts and other not-for-profit organisations on insolvency, restructuring and dissolution. We help trustees and decision-makers assess their position, understand their responsibilities and consider whether the organisation can be rescued, restructured or should be brought to an orderly close.

Where closure is necessary, we can provide guidance on winding up the organisation’s affairs, dealing with creditors and liabilities, transferring or applying remaining assets and completing the appropriate dissolution process. The procedure required will depend on the charity’s legal structure and financial position.

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Charity Insolvency and Dissolution Legal Services

We support charities and not-for-profit organisations facing financial difficulty or considering closure, including:

  • Assessing legal options where insolvency may be a concern
  • Drafting andAdvising charities experiencing financial distressreviewing collaboration agreements
  • Advising trustees and directors on their responsibilities
  • Supporting organisations considering restructuring or rescue options
  • Advising on creditor claims and outstanding liabilities
  • Supporting solvent charity closures and dissolutions
  • Advising on the transfer or application of remaining charitable assets
  • Addressing restricted funds, permanent endowment and special trusts
  • Supporting communications with the Charity Commission and other relevant bodies
  • Working alongside insolvency practitioners and other professional advisers where required
  • Advising on risk allocation, liability and termination arrangements
  • Reviewing existing collaborative arrangements and documentation
  • Supporting organisations where an informal partnership needs to become more formal
  • Advising on the legal implications of expanding or restructuring an existing collaboration

Why Instruct DTM Legal?

When a charity is facing financial pressure, early decisions can have a significant impact on the options that remain available. We provide clear advice to help trustees understand the organisation’s position and take appropriate action before circumstances become more difficult to manage.

Our approach considers more than the immediate financial problem. We take the time to understand the charity’s activities, funding arrangements, assets, liabilities and wider objectives so that advice is based on the realities facing the organisation. Where there is a viable route to restructuring or resolving financial difficulties, we can help explore the available options.

If closure becomes necessary, we help organisations approach the process in a structured and orderly way. Different requirements can apply depending on whether the organisation is a charitable company, CIO, trust or unincorporated association, making it important to identify the correct procedure from the outset.

Where formal insolvency issues arise, our Charity & Philanthropy team can work alongside DTM Legal’s Business Recovery & Insolvency specialists and external insolvency practitioners as appropriate. This enables us to provide coordinated legal support while helping trustees and directors navigate difficult and often time-sensitive decisions.

We provide:

  • Clear advice on the options available to your organisation
  • Early identification of legal and financial risks
  • Practical guidance for trustees and directors making difficult decisions
  • Support with creditor issues and potential restructuring
  • Advice on the appropriate process for winding up or dissolution
  • Coordinated support throughout complex or urgent situations

Get in Touch

If your charity is experiencing financial difficulties or considering dissolution, seeking advice early can help trustees understand their responsibilities and preserve as many options as possible.

Contact Alison and the Charity & Philanthropy team by calling 01244 354 800 or via email at alison.brennan@dtmlegal.com.

Key Contact
Head of Business Recovery
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Key Considerations for Charities Facing Insolvency or Dissolution

Having an accurate picture of the organisation’s position can help your solicitor identify the issues that require immediate attention and advise on the available options. Read our Key Considerations guide to understand some of the points a solicitor may wish to discuss when responding to your enquiry. It can help you prepare the relevant information and make your initial conversation more productive.

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DTM Legal
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Charity & Philanthropy Team

Alison Brennan

Head of Compliance and Service Delivery
Richard Thomas

Head of Business Recovery

Frequently Asked Questions

Commonly asked questions when navigating Insolvency and Dissolution as a charity or not-for-profit.

Warning signs can include difficulty paying suppliers, employees or other debts when they fall due, persistent cash-flow shortages or liabilities exceeding the organisation’s available assets.

For charitable companies and CIOs, Charity Commission guidance identifies an inability to pay debts when due and insufficient assets to cover liabilities as key indicators of potential insolvency. If trustees are concerned, professional advice should be obtained promptly rather than waiting until the organisation is unable to continue.

Trustees should obtain a clear and current understanding of the charity’s finances and seek appropriate professional advice as soon as possible. They should also carefully document the advice received and the decisions subsequently made.

For an insolvent charitable company or CIO, protecting the interests of creditors becomes a priority, and continuing to operate where there is no reasonable prospect of avoiding insolvency can create additional risks. The position for an unincorporated charity differs, including potential personal liability for trustees, which makes identifying the organisation’s legal structure particularly important.

Any remaining assets must be dealt with in accordance with the charity’s governing document and the legal powers available to it. This may involve transferring assets to another charity with appropriate charitable purposes, while particular care may be required for restricted funds, permanent endowment, designated land or assets held on special trusts.

The correct arrangements should be established before the charity is formally closed so that assets and ongoing responsibilities are not left unresolved.

A solvent charity can decide to close, but it must follow the appropriate process for its legal structure and its governing document. Trustees will need to deal properly with outstanding liabilities and assets and complete any required steps with bodies such as the Charity Commission or Companies House.

A charity that is insolvent cannot necessarily use the same voluntary closure process. Legal advice can help establish whether formal insolvency procedures or another approach may be required.

Potentially. The options will depend on the severity of the financial difficulties, the organisation’s legal structure and whether there is a realistic way to create a sustainable financial position.

Possible solutions may include restructuring liabilities, negotiating with creditors or making wider operational changes. Charitable companies and CIOs may also have access to certain formal restructuring procedures. Taking advice early generally provides more opportunity to assess potential rescue options before circumstances deteriorate further.

What our Clients Say

See what our customers have to say about their experience

Review Solicitors Stars
5/5 350+Reviews
Anonymous
01/10/2023
The DTM Legal LLP are one of our charity’s most valued legal skill donors. We can rely 100% on DTM Legal’s support. They are always quick to respond and very efficient and thorough in their work. They set out the parameters to which they are able to offer pro bono support and have a personable approach, which puts the charities at ease, during what can be stressful situations.
Dianne Parrish
26/05/2026
Alison and her colleagues at DTM Legal have provided legal support and peace of mind for a wide range of organisations consistently over many years. Expertise, solutions and guidance delivered promptly with clarity.
Anonymous
01/10/2023
Our initial key contact has been such a pleasure to work with, Alison Brennan. Alison always responds to email requests promptly and, wherever possible, will offer to help either directly, if the skills request is within her area of expertise, or she will facilitate support from her colleagues in other departments, within the DTM Legal practice. Our charities are always very happy with Alison, Kate and their respective teams’ support.

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