The long-awaited Charitable Incorporated Organisation (CIO) is a new legal structure, under the Charities Act 2011, designed specifically and only for charities.
A CIO:
- is an incorporated form of charity which is not a company
- only has to register with the Charity Commission and not Companies House
- is only created once it is registered by the Commission
- can enter into contracts in its own right and its trustees will normally have limited or no liability for the debts of the CIO
The CIO was created in response to requests from charities for a new structure which could provide some of the benefits of being a company (e.g. legal personality and limited liability) but without some of the burdens (e.g. the additional administrative burden of dual registration and regulation under both charity law and company law).
The CIO will add to the range of legal structures that charities can choose to adopt. It is expected to be popular so a phased implementation plan for implementation has been set out, with indicative dates (i.e. they may change – but on schedule so far) shown below.
As you will see, the process will first be open to brand new charities, then to existing unincorporated charities who want to set up a CIO and transfer assets into it (starting with larger-income charities and gradually opening up to smaller ones). Applications from existing incorporated organisations (Charitable Companies Limited by Guarantee, Community Interest Companies, or Charitable Industrial and Provident Societies) that wish to convert into CIOs will not be accepted until sometime in 2014 (subject to Parliamentary approval of regulations, timetable to be announced)
| Indicative date |
Type of organisation |
Income bracket |
| 10 Dec 2012 |
Brand new charities |
Over £5k |
| Mar 2013 |
Existing unincorporated charities |
Over £250k |
| 1 May 2013 |
Existing unincorporated charities |
£100k to £250k |
| 1 Jul 2013 |
Existing unincorporated charities |
£25k to £100k |
| 1 Oct 2013 |
Existing unincorporated charities |
£5k to £25k |
| 1 Jan 2014 |
Existing unincorporated charities AND
Brand new charities |
Less than £5k |
| During 2014 |
Existing incorporated organisations. |
May be phased |
More Information
On the Charity Commission website
Information and guidance on CIOs. Includes model constitutions, information on how to set up and run a CIO, and the latest updates on CIO implementation.
www.charity-commission.gov.uk/Start_up_a_charity/Do_I_need_to_register/CIOs/default.aspx
Considering incorporation?
See this very helpful article CIO – Yes or No? on Sandy Adirondack’s legal updates website for some questions to ask yourself and issues to consider when deciding whether to become a CIO or use some other structure:
And on the same website an update on CIOs and what is involved in setting one up.
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