Charities can plan now for CIO status

Small to medium sized charities thinking of setting up a corporate structure are being advised to plan ahead for the introduction of the Charity Commission’s new Charitable Incorporated Organisation (CIO) status.

Explains Alison Barr, a partner with Barr Ellison specialising in commercial and corporate law: “Charities which are set up with a corporate structure have the advantage of their trustees not being personally liable – the main areas of liability being in respect of property, employees, contracts and investments -  but they also have to register with both the Charity Commission and the Registrar of Companies at Companies House and provide accounts and returns for both. With the introduction of the Charitable Incorporated Organisation, they will receive the benefits of a corporate structure but with a single registration.”

No date has yet been fixed for the introduction of CIOs , but Alison believes it is something from which small to medium sized charities that are currently unincorporated could benefit. For charities which do have a corporate structure, costs after conversion will be lowered and regulatory requirements will be less onerous.  “It will be quite complex converting to a CIO, but the long term benefits should make it worthwhile. I’d recommend that charities thinking of converting to a corporate structure wait until CIOs are introduced but, in the meantime, think about some forward planning to simplify the transfer when the time comes.”

Larger and very small charities are less likely to benefit, says Alison. “Larger charities, particularly those which work overseas where CIOs will not initially be understood, are less likely to be interested, as they are more likely to be set up with sophisticated systems and accounting procedures which comply with company law. For very small charities the benefits are probably not worth the cost of converting.”

More details on CIOs can be found at http://www.charity-commission.gov.uk. To discuss your options, contact Alison Barr.

The information given in this article is of a general nature only and should not be considered as advice applicable to any particular situation for which specific request should be made to us.

"Thanks for making our house purchase go so smoothly. I've tended to find, to be honest, that lawyers have been the bottleneck with previous purchases, but that has not been my experience with Barr Ellison Solicitors."
Ben Coppin of Cottenham

Keep up to date with our news

By entering your email you are agreeing to our Privacy policy.