What is a Royal Charter?
A Royal Charter incorporates a body, turning it from a collection of individuals into a single legal entity.
A Royal Charter turns a collection of individuals into a single legal entity. Known as “incorporation”, Charters are granted by the King on the advice of the Privy Council.
This short briefing explains what a Royal Charter is and how an organisation can become incorporated in this way.
What is a Royal Charter?A Royal Charter is a legally binding document which incorporates a body, turning it from a group of individuals into a single legal entity. A charter is granted by the King under the royal prerogative (rather than an act of Parliament) and on the advice of the Privy Council. An act of Parliament takes precedence over a charter.
Types of chartered bodies include:
- public bodies (created through a state sponsored charter (PDF), whereby a body is created at the government’s initiation), such as the BBC and the British Council
- charities, such as the Royal Society for the Protection of Birds, the Royal Horticultural Society and the Scout Association
- universities and colleges in England, Wales and Northern Ireland; for example, King’s College London, the University of Manchester, Cardiff University and Queen’s University, Belfast (the last of these was chartered under the Irish Universities Act 1908)
- professional institutions, such as the Royal Institute of British Architects and the Chartered Institute of Marketing
Daniel Weinbren, Royal charter of the Open University, via Wikimedia Commons
According to the Privy Council Office, incorporation by Royal Charter is a “prestigious way of acquiring legal personality” and “reflects the high status” of a particular body. This legal personality is distinct from that of bodies created by or under statute, such as statutory corporations and companies under the Companies Acts. If organisations incorporated by charter are registered at Companies House, they are allocated an identification number with the prefix “RC” to distinguish them from statutory bodies.
Craies on Legislation (a legal text) states that the grant of a charter has the essential qualities of an executive rather than legislative act and is “best not described as legislation”. A Royal Charter takes legal effect upon the date on which it is sealed by the Crown Office, or at a later date specified in the charter.
The charters of some bodies provide that individuals who meet certain criteria may use an individual chartered title, such as chartered surveyor, chartered engineer or chartered banker. A list of approved charter designations is available on the Privy Council Office website. As “charter” and “chartered” are defined as “sensitive words” in company names, their use requires evidence of a Royal Charter.
While most Royal Charters are granted under the prerogative, borough charters are granted under section 245 of the Local Government Act 1972. This provides the King in Council (a meeting of the Privy Council at which the King is present) with the power to confer borough status on a petitioning district council via the grant of a charter. Boroughs with Royal Charters have a historic connection with royalty; the charter is symbolic and does not confer any extra powers on the borough.
History of Royal Charters Early Royal ChartersRoyal Charters date back to the 13th century. Initially, a charter granted rights or privileges to the King’s subjects, created towns and cities, or governed territories. The Corporation of the City of London is still partly governed by its historic Royal Charters, as are the Channel Islands (Guernsey and Jersey). Perhaps the most famous Royal Charter was Magna Carta (Great Charter) which was approved by King John in 1215.
Charters granting corporate personalityThe first Royal Charter to grant a corporate personality to a group of people conducting activities for public benefit was granted to the University of Cambridge in 1231. The first Royal Charter granted to a group of people conducting activities for private benefit was granted to the Sadlers Company in 1272. The first grant of a Royal Charter to a group of persons engaged in a profession was to the Royal College of Physicians in 1518.
Other Royal Charters were granted to major economic institutions, notably the Bank of England in 1694 and the South Sea Company in 1711. Between the enactment of the Chartered Companies Act 1837 and the Limited Liability Act 1855, the grant of a charter was the principal means by which an incorporated body could engage in economic activity without putting at risk the entire assets of those who had subscribed capital. The 1855 act was the first of many which offered an alternative statutory route, and therefore the incorporation of commercial bodies by Royal Charter reduced markedly.
Charters in the former British EmpireChartered bodies were also created in other parts of the then British Empire. Those in the United States (mainly colleges and universities) were preserved under the post-independence US Constitution and some US charters cannot be altered by state legislation, while charters in Ireland (which seceded from the UK in 1922) can only be altered by the Oireachtas (the Irish Parliament). A prominent example of an Irish chartered body is the Royal Irish Academy.
Recent chartersSince the second half of the 19th century, most bodies incorporated by Royal Charter have been educational, charitable or professional. From the 1950s, one criterium for the grant of a charter has been that the petitioner shall exist not solely to advance the interests of its members but also, and primarily, to advance the public interest.
The Privy Council Office website has a record of charters granted which totals more than 1,000.
Acquiring or amending a Royal Charter Petitioning for a Royal CharterAn organisation seeking the grant of a Royal Charter must petition the King in Council. On its website, the Privy Council Office invites informal approaches before a charter petition is lodged (PDF). Petitioners are advised to take soundings among other bodies which may have an interest in the outcome. Once a formal petition has been lodged, it is advertised in The Gazette, the UK’s official public record. Any objector is entitled within six weeks to lodge a counter-petition. Both a petition and draft charter must be approved by the Attorney General for England and Wales.
The petition is then considered by a sub-committee of the Privy Council. This comprises government ministers from departments most closely connected with the activities of the petitioner. Unanimity among the members of the committee is required before a recommendation for the grant of a Royal Charter is made. If the petition is successful, the draft charter will be approved by the King in Council and the Lord Chancellor directed to prepare a warrant for the King’s signature. This provides authority for the charter to be “passed under” the Great Seal of the Realm.
Amending a Royal CharterAn institution incorporated by charter is, subject to the general law, largely self-regulating and not answerable to the Privy Council or the Privy Council Office in relation to the conduct of its internal affairs. A Royal Charter will specify the process an organisation needs to follow internally to apply for amendment to its charter, byelaws or statutes.
Amendments to charters (known as a supplemental charter (PDF)) can be made only with the agreement of the King in Council, while amendments to the body’s byelaws or statutes require prerogative Orders of Council (which do not need the Monarch’s approval).
The Charities Act 2011 also provides statutory powers for charities established or regulated by Royal Charter to amend the terms of their charter. Amendments under section 68 require a cy-près scheme (which changes the purposes for which a charity’s assets are to be applied) made by the court, while section 280C allows amendments if it is “expedient in the interests of the charity to do so” and there is no existing power under the charter. Resolutions to this effect are approved by Order in Council.
Royal Charters and the mediaMost Royal Charters do not require parliamentary oversight or approval. Two important exceptions relate to the BBC and press regulation.
BBCThe BBC was established by Royal Charter in 1927, and this is subject to periodic reviews. The current BBC charter (PDF) began on 1 January 2017 and ends on 31 December 2027. Although its renewal does not require parliamentary approval, the BBC’s charter has often been debated in Parliament and scrutinised by select committees of both Houses. The devolved governments are also consulted.
The charter sets out the public purposes of the BBC, guarantees its independence and details its governance arrangements. The charter also makes provision for an agreement between the BBC’s Director-General and the Secretary of State (PDF), which provides further governing arrangements.
Press regulationThe 2013 Royal Charter on press regulation (PDF) requires that there is approval from both Houses of Parliament (and, where relevant, the Scottish Parliament), with at least a two-thirds majority in both Houses, before any amendments can be made to the charter or it can be dissolved. Section 96 of the Enterprise and Regulatory Reform Act 2013 further provides that the charter cannot be altered unless changes are in accordance with these requirements.
Can a Royal Charter be revoked?Yes, although this is rare.
The Privy Council Office has stated that it is not aware of any Royal Charter being revoked since the reign of King Charles II (apparently in respect of the Somers Isles Company in 1684). The Privy Council Office states that the Monarch cannot unilaterally revoke a charter:
The Sovereign has no power to revoke a Charter ‘at will’, without the consent of the original grantees or their successors. In the absence of consent, it may be that the only way to revoke a Charter granted under the prerogative would be by primary legislation.
Counsel acting for the Privy Council Office in a 2014 case stated that it was prepared to threaten revocation of a charter “in appropriate circumstances” and that there had been “one such occurrence in recent times”.
Royal Charters and the courtsThe Privy Council Office website states that the Privy Council cannot unilaterally intervene in the internal affairs of a chartered body and would “be acting beyond its remit if it attempted to do so”, leaving it liable to judicial review. If an individual or other body believes a chartered body is in breach either of its charter or of the general law, then it can take legal action.
Case law in this respect is limited. The first time that the grant or refusal of a Royal Charter was the subject of litigation was in the case of The Project Management Institute, R. (on the application of) v The Minister for the Cabinet Office [2014] EWHC 2438 (Admin). The US-based Project Management Institute unsuccessfully challenged the decision to grant a Royal Charter to the UK-based Association for Project Management.
Further readingAbout the author: Dr David Torrance is a researcher at the House of Commons Library, specialising in monarchy and the constitution.