Royal Charter (RC)

What is a Royal charter?

A royal charter is a grant or a right issued formally to an individual or corporation to start a company. It is as an old form of incorporation in UK, granted by monarch on the advice of Privy Council. Privy Council is a formal body established with a group of senior politicians from House of Lords or House of Commons that provide advice to monarch on those government businesses that fall out of departmental ministries including issuing orders of council.

In old times, all the companies are approved by royal charters but the change in time has given influence to many more new methods of incorporating a company and because of this change “Royal charter” become as outdated method of incorporating a company. Some significant organizations are still established with the help of Royal charter such as Universities located in districts and learned societies. For ex – BBC, Bank of England, Royal Opera house.

Purpose of Royal charter

Generally, the purpose of a charter is to create & define the purpose of public or Private Corporation and their privileges. In Today’s time, royal charter grant rights to those professional institutions & charities whose main aim is to work towards public interest and for those which are able to show financial stability, continuity and glory.

Requirements to incorporate a Royal Charter

In order to incorporate a new charter, you need to lodge a petition which is public and considered expensive in terms of preparation of formal documents. Due to the public nature of the petition, any individual and organization can comment and lodge a counter petition against it. Any proposal against which counter petition has been made has very few chances of success.

You must approach Privy Council at the earliest to get right advice on how to make your formal petition a success. Memorandum is required for this purpose which covers –

1. History of the body
2. Role of the body
3. The academic & other qualifications required for membership of the various grades.
4. The Educational role of the body within its membership and in a wider way.
5. The achievements of the body
6. Details regarding number of members, grades, management organisation & finance.
7. Proof of the glorification of the body in their respective field and area.
8. Details of government department along with the main policy interest or sponsors of the body along with the contact details of the official persons and any wider international links.
9. Valid reason for the grant with respect to public interest as well as bringing the body under government control.

Criteria for a Royal charter

Charters are granted very rarely now days and therefore you need to meet number of criteria’s in order to incorporate a charter. There might be a difference in the criteria of institutions and charities but mainly the application approved on the basis of merits. The main criteria in the case of professional institutions are as follows –

• The applicant institution should comprise of the members with a unique profession and should have most of the members from the eligible field for membership. It should not overlap with other bodies.
• Corporate members of the institution should be well qualified and earned at least first degree level in a relevant discipline.
• The institution should be financially stable & able to show the track record of relevant achievements they earned over a number of years.
• Privy Council approval is required by the charter in case of future amendments and by laws of the body.

Meeting the specified criteria above may not guarantee that charter will automatically be granted approval.