Get Chartered, or how to reach the Gold Standard of incorporated body with a Royal Charter

This blog article is based on an interview I conducted with Keith Lawrey, winner of the City Livery Club's Root and Branch Award (2017). The Root and Branch Award recognises the Liveryman who has made an outstanding contribution to the wider aims of the Livery, and is usually presented by the Lord Mayor of London at the City Livery Club's annual civic luncheon in the City.

Keith achieved his award for decades of pro bono work for the Livery Companies specifically guiding them through the process of obtaining a first Royal Charter, supplemental Royal Charters or amendments to an existing Royal Charter.

A transcript and audio extracts of the interview will follow at a later date, for the time being this article explores the reasons why a Livery Company would want to petition the Crown for a Royal Charter and the process as it stands today. In time past Royal Charters were granted by the Monarch, and sometimes withdrawn, usually as a tax raising measure or means to grant monopolistic powers to a corporation. Times have moved on, yet the prestige of attaining Royal Charter status remains and in many ways it is now more difficult to obtain a Royal Charter than the days when a company could simply buy the indulgence of a greedy monarch.

Note: A Royal Charter should not be confused with a Royal Warrant as issued to business that supply senior members of the Royal Family with goods or services. A Royal Warrant is essentially a recognition of preferred supplier status that is granted for a period to five years and may be extended.

A Royal Charter is a governance document that forms a new corporate body and provides for its regulation. A Royal Charter is permanent and may only be withdrawn by the Crown through due legal process.

A photo of a member of the Worshipful Company of Information Technologists holding a framed facsimile of the Royal Charter granted to that Company in June 2010.
Facsimile of the Royal Charter presented to the Worshipful Company of Information Technologists in June 2010. The presentation was made by HRH The Earl of Wessex on behalf of HM The Queen at a dinner in Mansion House. The original is on display in IT Hall
Why become a Royal Charter corporation?

A Royal Charter is the gold standard of official recognition of an incorporated body by the Crown. Royal Charters are rarely granted (circa 1,000 since the Norman Conquest) and in modern times they are generally reserved for universities, learned societies, professional bodies and Livery Companies. As such the principal benefit of a Royal Charter is that of the prestige that comes with the imprimatur of the state expressed through the authority of the Sovereign. A Royal Charter is not easily granted, and neither should it be so.

Note: Incorporation by Royal Charter predates the concept of a limited company by eight centuries.

There are a few practical benefits including the fact that the members of a Royal Charter corporation are not individually and severally liable for the companies debts, i.e., the company is not one in which the members have limited liability, rather they have no liability. Furthermore a Royal Charter company is not required to lodge accounts with Companies House.

Since Livery Companies are not trading bodies and rarely go bankrupt (compared to other forms of incorporated body) these practical benefits don't provide a compelling business case for obtain Royal Charter status to most Livery Companies. However, formation of a Royal Charter company creates a legal entity which is separate from the members and hence may sue and be sued, own and sell property, without the members being liable in any way.

A Royal Charter corporation may also be granted special rights and privileges by the Crown, such as the right to operate a monopoly (lawfully). Some Livery Companies still retain monopolistic rights over their trade, although few are actively enforced. An example is that of the Gardeners' Company's right to regulate the trade within the City and out to a radius of 5 miles from the City limits.

The Worshipful Company of Security Professionals are a modern example of a Livery Company that has used its Royal Charter powers to setup and maintain a register of Chartered Security Professionals and is the regulatory body for that professional status.

A Royal Charter is the gold standard of regulation for a company, charity, learned society or professional body and it is only granted to those that exhibit the highest standards of corporate governance. The Privy Council must be satisfied that the government can turn to the Royal Charter company for advice and guidance in its particular field if necessary, hence a high degree of trust is placed in the company. Royal Charters are only granted to companies that act in the public interest.

Note: Royal Charter companies are often empowered with regulatory powers for their profession.

When can a Livery Company petition for a Royal Charter?

A Livery Company that seeks Royal Charter status will usually do so once it has achieved a certain standing in the City and within its occupation. When that state of affairs is reached will differ from one company to the next, there is no rush and should be no rush. There's no requirement to have a hall or centuries of history, and the requirements of becoming a Livery Company will have already been met in full by the time the company petitions the Crown.

Some companies have obtained multiple Royal Charters, and example is the Wax Chandlers who have one of only three Royal Charters granted by Richard III, and several more recent ones including a Royal Charter granted by HM The Queen.

How does a Livery Company petition for a Royal Charter?

The process begins with an informal enquiry to the Privy Council, and whilst it is not necessary to obtain legal advice, the services of a lawyer with experience in navigating the path to a Royal Charter is often sought. An interview with the Privy Council is often the first formal step during which the company will be advised as to the likelihood of success.

The next stage is a Letter of Intent, which is in the form of an expanded petition, whereupon the Privy Council undertakes preliminary investigations through its advisors. Assuming that positive indications are received by the Privy Council the company must then submit a Petition, a draft Charter (memorandum of association), a set of Bylaws (articles of association) and a list of 'non-objectors'. The non-objectors are supporters in all but name, and generally should include, among others, one or more government departments, learned societies, professional bodies and leading universities operating in the same field as the petitioning company. In short, any organisation that has corporate gravitas and eminence that will enhance the petition.

Once these documents are submitted to the Privy Council, a small panel is formed of appropriate government department officers and government ministers, who determine whether to submit the petition to the non-objectors and other advisers in the industry or profession concerned.

If there are no objections from either the non-objectors or the advisers a notice is then placed in the London Gazette for eight weeks. This offers the opportunity for others to comment, the London Gazette is a public record and freely available. Here for example is a notice for a Supplemental Charter presented by the Worshipful Company of Broderers.

The final step is for the Privy Council to recommend to Her Majesty that the Great Seal be attached to the Royal Charter. The final decision lies with Her Majesty, who of course only acts on the advice of her ministers. The point in time at which the Royal Charter becomes law is when the seal is attached.

Nowadays a template Royal Charter is often used for Livery Companies wishing to petition the Privy Council. The template covers most of the provisions that are common to all modern Livery Companies and simplifies the process considerably although provisions may need to be carried over from previous Royal Charters.

Note: The template was developed by Keith Lawrey in partnership with Alexander Galloway former Clerk to the Privy Council (1998 - 2006) and Clerk to the Glaziers' Company (2006 - 2012).

Since the standards required of a Royal Charter company are exceptionally high, the process involves significant due diligence and enquiries by the Privy Council into the bona fides of the company. Fortunately those tests are largely a formality for a Livery Company which will already have been subject to a long series of qualifications and checks during its progression from Guild to Livery Company status.

A photo of the Royal Charter of the Worshipful Company of Saddlers hanging in Saddlers' Hall in the City of London
The format of a Royal Charter can differ from one company to the next. Some are richly illuminated such as this Royal Charter granted to the Worshipful Company of Saddlers which features the arms of Monarch with those of the Company and of the City of London 
What are the criteria for organisations that wish to petition for a Royal Charter?

The Privy Council website sets out the pre-conditions for any organisation that wishes to petition for a Royal Charter, and on first glance it would seem that a Livery Company would not qualify since a membership of circa 5,000 and links with government departments are not characteristics of most Livery Companies. That said, the first Royal Charter issued to a company was that of the Worshipful Company of Weavers in 1155 AD and the Livery Companies have a 900 year history of successfully petitioning for Royal Charters so they fall into a category of their own.

Note: If the petitioning organisation already has a Grant of Arms (armorial bearings) there must be a clause in the Charter that transfers the arms from the unincorporated body to the Royal Charter company.

Photo of the Royal Charter of the Worshipful Company of Hackney Carriage Drivers with the Company's Letters Patent granting arms and Letters Patent forming the Company
The Royal Charter (centre) of the Worshipful Company of Hackey Carriage Drivers with the Letters Patent granting arms (left) and the Letters Patent forming the Livery Company (right) on display in St Bartholomew the Great

What are the costs involved?

The only direct cost associated with petitioning for a Royal Charter is the drafting and printing cost for the Royal Charter document. The cost of producing the Charter may run to several thousand pounds including framing and production of facsimile copies (if desired). If a law firm is engaged, additional costs will be incurred.

How long does the process take?

Generally the process will take somewhere between 18 months and two years, although the process can take longer if non-objectors are unresponsive. A Royal Charter isn't granted until the seal is attached, which will usually be on a different date from the meeting of the Privy Council at which the Queen gives her assent to the Charter being granted. The presentation date of the Royal Charter will follow later still, but the legal status is conferred from the moment the seal is attached to the charter document.

The wax seal which is attached to the Royal Charter of the Worshipful Company of Engineers
Wax seal attached to the Royal Charter of the Worshipful Company of Engineers

What role does the Court of Aldermen have in the process?

One way in which the process differs for Livery Companies is that the City of London's government plays a role in guiding Livery Companies that wish to petition the Crown for a Royal Charter.

The Aldermen and Magistracy Sub-Committee of the Court of Aldermen has a vital, and necessary role in advising Livery Companies on the process of petitioning for a Royal Charter and its support must be obtained before the Company approaches the Privy Council for a first or Supplemental Charter. Generally no petition to the Privy Council by a Livery Company will be successful without the support and involvement of the Court of Aldermen. This is as an additional step which other prospective Royal Charter corporations do not have to undertake.

Which Livery Companies have a Royal Charter?

Most, but not all of the City's Livery Companies have a Royal Charter, and the Privy Council's website provides an incomplete (and not entirely accurate) list of all the organisations that have been granted a Royal Charter since the Norman Conquest. The first among that list is the University of Cambridge (1231 AD) whereas the Weavers' Company still have their original Royal Charter dated 1155AD, perhaps the Privy Council would benefit from a chat with the Upper Bailiff of the Weavers' Company!

Where can I find out more about Livery Companies and their relationship with the Crown and the City of London's government?

If you would like to learn more about the City's many customs, ceremonies, traditions, institutions, officers and landmarks, you may enjoy The City of London Freeman's Guide available online from Apple (as an eBook), Amazon (in hardback or eBook) or Etsy (in hardback or hardback with the author's seal attached)

The front cover of The City of London Freeman's Guide LORD MAYOR'S edition


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