Part 1: Purposes, Powers and Governing Documents Section 1: Alteration of charitable company’s purposes
Section 1(2) amends section 198(2)(a) of the CA 2011, which defines those amendments of a charitable company’s articles which will constitute a "regulated alteration" of its objects (companies have "objects" under the Companies Act 2006, whereas charities have "purposes" under the CA 2011; the two terms are synonymous). The amendment means that an alteration to the statement of the company’s objects which does not alter the substance of the charitable purposes of the company will not constitute a "regulated alteration" (although trustees should think very carefully about whether even a small drafting change might make a subtle alteration to the substance of the purposes). However, it also means that an amendment other than to the statement of the company’s objects, which nonetheless alters the substance of the company’s charitable purposes, will constitute a regulated alteration.
	The following are some examples of an amendment "which alters the charitable purposes of the company".
A change in the geographical area of benefit, for example, "for the benefit of the residents of X parish". Changing this to "for the benefit of the residents of Y parish", or "X and Y parish", or a wider geographical area that included X parish, would be a regulated alteration.
A change to a part of the statement of purposes which sets out the means of achieving those purposes, for example, changing "the advancement of education by the provision of a school" to "the advancement of education", would be a regulated alteration. Contrast this with a change to a part of the statement of purposes which merely gives an example of how the purposes might be achieved: changing "the advancement of education including, but not limited to, by the provision of a school" to remove reference to the provision of a school would not be an alteration to the charitable purposes of the company.
For certain charities, such as almshouse charities, the criteria for beneficiaries is so fundamental to the charity’s purposes that an amendment to those provisions would constitute an alteration of the charitable purposes of the company.
	The amendment reflects the description of a "regulated alteration" of a CIO’s constitution in section 226(2)(a) of the CA 2011.
	Section 1(3) inserts a new subsection into section 198 of the CA 2011. The new subsection sets out the matters which the Charity Commission must consider in deciding whether or not to give consent to an alteration of a charitable company’s purposes. Section 2(2)(b) replicates that provision for CIOs. Those considerations are:
The purposes of the company when it was established.
The desirability of securing that the purposes of the company are, so far as reasonably practicable, similar to the purposes being altered. This consideration thus takes into account the current purposes of the company, including any changes since it was established.
Current social and economic circumstances.
	The new considerations broadly reflect the matters which the Charity Commission must have regard to, under section 67(3) of the CA 2011, when changing the purposes of an unincorporated charity by way of a cy-près scheme. However, the reference to "the spirit of the original gift" is replaced with "the purposes of the company when it was established" in recognition of the fact that there may not always be an identifiable "original gift".
	The new considerations are the same as those which the Charity Commission will have to consider in deciding whether to consent to an alteration to the purposes of an unincorporated charity under the new section 280A(10) CA 2011, inserted by section 3(2). Accordingly, the Act creates consistency in the matters that the Commission must consider when deciding whether to consent to a change of purposes by a charity, regardless of whether the charity is a company, CIO, or unincorporated charity.
	The amendment to section 337 of the CA 2011 by section 37 of the Act confers on the Charity Commission a discretionary power to give notice of a proposed amendment, or to require the charity to give such notice, before consenting to a regulated alteration.