Registering as a Charity

Registering as a charity in Scotland is a legal process overseen by the Office of the Scottish Charity Regulator (OSCR). OSCR maintains the public register of Scottish charities and ensures they comply with charity law. Registration is required for any organisation that wants to call itself a charity and benefit from charitable status in Scotland.

This page is a brief description of the key principles and areas that applicants must be aware of. It is not exhaustive and further resources that go into necessary detail can be accessed at the bottom of the article.

Legal framework and eligibility criteria

Charities in Scotland are primarily regulated under the Charities and Trustee Investment (Scotland) Act 2005. This Act defines what constitutes a charity, the duties of charity trustees, and the role of OSCR, the Scottish Charity Regulator.

To register as a charity in Scotland, an organisation must:

• have exclusively charitable purposes as defined in the 2005 Act
• provide public benefit in achieving those purposes
• meet governance and financial requirements, such as having a suitable governing document and an appropriate governing body made up of eligible individuals
• pass the charity test which brings together all the components above (see below)

Charitable purposes

Charitable purposes in Scotland are legally defined under the Act. To qualify as a charity, an organisation must operate exclusively for charitable purposes and provide public benefit. The Charities and Trustee Investment (Scotland) Act 2005 outlines 16 charitable purposes, including:

1. the prevention or relief of poverty
2. the advancement of education
3. the advancement of religion
4. the advancement of health
5. the saving of lives
6. the advancement of citizenship or community development
7. the advancement of the arts, heritage, culture, or science
8. the advancement of public participation in sport
9. the provision of recreational facilities to improve life conditions
10. the advancement of human rights, conflict resolution, or reconciliation
11. the promotion of religious or racial harmony
12. the promotion of equality and diversity
13. the advancement of environmental protection or improvement
14. the relief of those in need due to age, ill-health, disability, financial hardship, or other disadvantages
15. the advancement of animal welfare
16. any other purpose that may reasonably be regarded as analogous to the above

Full guidance OSCR guidance available here

Types of charitable legal structures

Organisations applying to register as charities in Scotland usually take one of the following legal forms:

1. Scottish Charitable Incorporated Organisation (SCIO) – A legal structure designed specifically for Scottish charities.
2. Unincorporated Association – Suitable for smaller groups; does not provide legal personality or limited liability.
3. Company Limited by Guarantee – Must also register with Companies House.
4. Trust – Often used for grant-giving charities; governed by a trust deed.

The charity test

The Scottish Charity Regulator (OSCR) applies the charity test to determine whether an organisation qualifies as a charity. The test requires that:

• the organisation has only charitable purposes
• it provides public benefit in Scotland or elsewhere (see below)
• its governing document does not allow assets to be used for non-charitable purposes
• it is not controlled by government ministers
• it does not advance a political party

Public benefit

The concept of public benefit is central to determining whether an organisation qualifies as a charity. It refers to the positive impact that an organisation has on the public through its activities, provided those activities are aligned with the organisation’s charitable purposes. While many actions may benefit the public, only those directly advancing a recognised charitable purpose qualify as public benefit in the legal sense. The following principles begin to explain the concept of public benefit:

Alignment with charitable purposes

Public benefit must result from activities that further the charitable purposes set out in an organisation’s governing documents. General acts of goodwill, however well-intentioned, do not meet this requirement unless they are clearly and demonstrably in pursuit of a charitable aim.

Varied and Measurable Impact

Charities deliver public benefit in many different forms. In some cases, the benefit is clear and measurable—for example, treating or curing illness in targeted populations. In other cases, such as the preservation of cultural heritage, the benefit may be less tangible but still significant.

While not all benefits are easily quantified, this does not diminish their value or relevance in assessing charitable status.

Direct and Indirect Benefits

Charitable activities often produce both direct and indirect public benefits. For example, initiatives that improve literacy and health awareness among women who speak English as second language directly support the women involved, while also contributing to wider benefits, such as better public health outcomes for their children.

Scale and Scope

There is no minimum threshold for the amount of benefit a charity must provide. Organisations operating on a small scale or within local communities can still satisfy the public benefit requirement, provided they can demonstrate that some level of genuine benefit is being delivered. Similarly, charities do not have to do everything to deliver their charitable purpose, all at once, all of the time.

Active Delivery of Benefit

An organisation must be actively engaged in delivering public benefit or, in the case of new applicants, demonstrate a clear intention to do so. Charities that remain inactive for extended periods may be deemed not to meet the **charity test**, which could result in the loss of charitable status.

Exceptions

While the general principle requires active benefit, there are limited exceptions. These may apply in specific circumstances and are assessed individually by regulatory bodies such as the Office of the Scottish Charity Regulator (OSCR).

Further considerations

In deciding whether or not your organisation provides public benefit, OSCR also considers if:

• there is any private benefit from your organisation’s activities

• there is any disbenefit to the public from its activities
• there are any unduly restrictive conditions on accessing the benefit your organisation provides

Undue restrictions

An unduly restrictive condition is a limit on who can access the benefit provided by an organisation where the restriction is not reasonable or justifiable in the context of what the organisation does and what its purposes are, or is unlawful.

The most common types of restrictions are:

• charges and fees
• geographical area of benefit
• limits on who the organisation will help

It is important to understand that few charities benefit the whole of the public. Many charities can and do restrict access to their services or activities, but still provide public benefit and so meet the charity test. For example, a charity set up to help people who suffer from a particular disease will restrict access to those diagnosed with the disease.

Application process

1. Prepare Governing Document

Applicants must have a constitution or other governing document that sets out the charity’s purposes and how it will operate.

2. Apply to OSCR

Applications are submitted online via the OSCR website. Required documents typically include:

• Governing document
• Chairt trustee details
• Financial projections or accounts
• Statement of activities and purposes

3. OSCR Assessment

OSCR will assess whether the organisation:

• Has charitable purposes only
• Meets the public benefit test
• Is ready to operate as a charity

The review may require a to and fro with the applicant to provide answers to questions, or clarity on aspects of the application. This can take many weeks, depending on the complexity of the application.

4. Registration Decision

If approved, the organisation is added to the Scottish Charity Register and receives a charity number (e.g., SC012345). It can then legally refer to itself as a “Scottish Charity” or “Charity Registered in Scotland".

Further resources and links

OSCR - Applying to become a charity

SCVO - Setting up a charity

The TSI Learning Portal includes an exhaustive 'Nuts and Bolts' course on unerstanding charity law including applying to become a charity

For further free, well-informed information, find your local Third Sector Interface (TSI) at the directory page here