Assets are anything and everything the governing body owns. Such as money, equipment, heritable property such as land and buildings and the rights attached to them, and items held in the museum collection.
If the governing body is insolvent, or approaching that situation, an Insolvency Practitioner (IPs) will need to be involved. IPs can help with rescue packages if brought in early enough or will take over the liquidation of assets if winding up is necessary.
If it appears that the museum’s liabilities are greater than its assets or the cashflow/forecasts suggest that the museum will struggle to meet its debts, it is important to seek professional advice as early as possible as the museum may be insolvent. The best person to speak to in this situation is an Insolvency Practitioner (IP) who will be able to provide advice and options on how best to deal with museum’s financial position. An IP is someone who is licensed and authorised to act in relation to an insolvent individual, partnership or company. IPs must follow the law and their work is monitored by regulators to make sure that they do. An IP will also be able to advise governing body members and trustees as to how it may impact them on a personal level, their obligations and what action they may need to take. An IP should provide initial advice free of charge, and if an IP led process is required then an appropriate fee basis would be agreed beforehand. The earlier advice is sought then the more options will be available and the greater the chance that measures can be taken to turnaround or rescue the museum.
You can contact any of the following IPs below for no-obligation initial advice:
Or you will be able to find other IPs via https://www.gov.uk/find-an-insolvency-practitioner
A museum’s collection is at the core of its existence. If a museum ceases to exist, its collection remains, and must be cared for or dispersed accordingly. Preparation is key.
In order to deal with the collection in its entirety it is important to know what the museum has in its care. Time and resources to undertake a Spectrum compliant inventory are essential if this has not already been done. This procedure will allow you to know what objects you have (unique number, object name and brief description), its current location, who has legal ownership, and help you advertise any object disposals.
Legal ownership of the objects needs to be established and understood to allow disposal of any collection items. Does the governing body own all the items? Are any artefacts on loan from other institutions or individuals? Or is the ownership uncertain? Depending on the answer different processes need to be followed. There is lots of information about how to do this successfully in our advice section, Introduction to Disposal, and on the Collections Trust’s website.
Items legally owned by the governing body are assets that can legally be disposed of but there are ethical considerations. Depending on the funding of the acquisition or stipulations that were agreed with the donor, these items may need to be returned rather than passed on to another public body. Your governing document should contain a statement that allows the collection to be transferred to another charitable body with similar objectives. But who will take on the collection? Do not assume that any other organisation will be able to take on your collection without first talking to them about it!
The collections of independent museums are potentially at risk if they are also a company which goes into administration. Unless the collection is held in a special charitable trust, and as such unavailable for distribution upon insolvency, they are treated as financial assets and can be sold off to meet the museum’s debts.
Moving an item from the museum’s care to somewhere else will take time and resources. The items will need to be packed correctly, stored and physically moved. Consideration of who is going to undertake these tasks and how they will be funded needs to be factored into any winding up process.
All loans you have from individuals and other organisations will need to be returned to their legal owners, your loan agreement records should provide you with all the details to be able to help this. Contact the lender to explain the situation and ensure that you have done this with enough notice to allow for the physical return and be aware of any costs that will need to be covered such as transportation. Information about loan in procedure is available on Collections Trust’s website.
Objects currently not in your physical care but are legally owned by the museum will need to be factored into the whole collection disposal, they are still your responsibility. It may be that the organisation that currently have them on loan may be an appropriate place for them permanently, but this should not be assumed.
When the legal ownership is unclear there are additional legal and ethical issues to consider. Further information about how to deal with objects in this situation is available from Collections Trust.
MGS Collections Disposal Planning Toolkit