The Office of the Scottish Charity Regulator has called for a wide-ranging review of the 2005 Charities and Trustee Investment (Scotland) Act, especially the section on the reorganisation of charities.
The section governs subjects such as changing the constitutions of charities, disposing of property, and mergers.
The organisation’s 2009/10 annual report, published yesterday, advocates a comprehensive evaluation of the 2005 act against its policy objectives and the consideration of any new policy context or objectives.
"We are increasingly aware of certain parts of the 2005 act that we believe would benefit from a more fundamental review, and particularly the reorganisation provisions of chapter five," it says.
"After four years of working with this part of the act, OSCR is very conscious of the difficulties around its interpretation and application. It is OSCR’s view that the policy underpinning this chapter in the act needs to be reassessed and the provisions redrafted."
An OSCR spokesman declined to provide further details on why the reorganisation section should be changed, but said there were problems both in the detail of the law and in its broad principles.
He said a wide-ranging review of the act would be sensible because it had been in place for five years.
The report also says OSCR has recommended to the Scottish government tht the legislation should be amended to make it clear that applicants hoping to register with OSCR must prove a connection with Scotland.
The spokesman said there was no requirement that a charity had a continuing connection with Scotland, such as having an office or one or more trustees resident in Scotland.
He said this meant there was a risk that organisations over which OSCR had no effective oversight could be on the Scottish charity register.
Another recommendation in the report is that door-to-door fundraisers should be required to "positively state" whether they are working for a charity, or for an agency on a charity’s behalf.