Insolvency and Asset Disposal Policy

Charity |

Purpose

The purpose of this Insolvency and Asset Disposal Policy is to ensure that, in the event of Coast Medic facing financial insolvency, all assets are managed, disposed of, and distributed in compliance with legal and regulatory requirements, while prioritizing the best interests of the charity and its beneficiaries.

Scope

This policy applies to all physical, financial, and intellectual assets owned or managed by Coast Medic, including but not limited to:

  • Cash and bank accounts
  • Vehicles, medical equipment, and office supplies
  • Intellectual property, including trademarks and copyrights
  • Digital assets such as databases and IT systems

Responsibilities

Trustees

Trustees hold the ultimate responsibility for overseeing the insolvency process and ensuring compliance with this policy. They must:

  • Assess and confirm the charity’s financial position.
  • Appoint an insolvency practitioner when necessary.
  • Approve any disposal or transfer of assets.
  • Ensure all actions comply with the charity’s governing document and applicable regulations.

Management and Staff

Management and staff are responsible for providing accurate financial and asset records, assisting in the valuation of assets, and ensuring the proper handling of assets during the insolvency process.

Insolvency Process

Initial Assessment

  • The trustees will convene to review the financial situation and determine whether the charity is insolvent or at risk of insolvency.
  • Professional advice from legal or financial experts may be sought to confirm insolvency status.

Appointment of Insolvency Practitioner

  • An insolvency practitioner experienced in the charity sector will be appointed to oversee the process.
  • The practitioner will work with trustees to prepare an action plan, including asset disposal and creditor repayment strategies.

Communication with Stakeholders

  • Notify key stakeholders, including funders, creditors, and regulatory bodies (e.g., Charity Commission), of the charity’s financial position and next steps.
  • Inform staff and volunteers about their roles and rights during the process.

Asset Disposal Guidelines

General Principles

  • All asset disposals must prioritize the charity’s mission and beneficiaries.
  • Restricted funds or assets must be used or transferred according to donor requirements.
  • Disposal must be transparent, documented, and conducted at fair market value, unless otherwise required by the governing document or law.

Approval of Asset Disposals

  • Trustees must approve all significant asset disposals and transfers.
  • The insolvency practitioner will provide recommendations on asset valuation and disposal methods.

Methods of Disposal

  • Sale: Assets may be sold at auction, through a broker, or via direct sale to ensure fair market value is achieved.
  • Transfer to Another Charity: Where possible, assets will be transferred to another organization with similar objectives to continue serving Coast Medic’s mission.
  • Donation or Recycling: For assets with low monetary value but potential utility, donations to other charities or recycling options may be considered.
  • Write-Off: Any assets deemed unsellable or of no value will be written off, with approval and documentation.

Proceeds from Asset Disposals

  • All proceeds from the sale of assets will be used to settle outstanding liabilities, with remaining funds distributed in accordance with the charity’s governing document and regulatory requirements.

Restricted and Designated Funds

  • Restricted funds or assets will be used solely for their specified purpose or transferred to another charity with the donor’s consent.
  • Designated funds will be handled in accordance with the charity’s financial policies and governing document.

Record Keeping and Reporting

  • A detailed record of all asset disposals, including valuations, methods of disposal, and proceeds, will be maintained.
  • Trustees will ensure that all relevant financial reports and documents are submitted to regulatory bodies (e.g., Charity Commission, HMRC) as required by law.

Legal and Regulatory Compliance

  • All actions taken during the insolvency process will comply with the Insolvency Act 1986 (UK) and any other applicable laws or regulations.
  • The charity’s governing document will be consulted to ensure asset distribution aligns with its provisions.

Monitoring and Review

This policy will be reviewed annually by the Board of Trustees or when significant changes in legislation or Coast Medic’s operational environment occur.

Approval and Implementation

This Insolvency and Asset Disposal Policy was approved by the Board of Trustees on 28/04/2024 and is effective immediately.