The Charity Commission is accepting online applications for organisations wishing to register as a charitable incorporated organisation (CIO).
The introduction of the CIO – a new legal structure designed specifically for charities – has been much delayed since it was provided for in the 2006 Charities Act, in response to demand from charities for a structure that could provide some of the benefits of being a company, but without some of the burdens.
CIOs are incorporated charities able to enter into contracts in their own right, whose trustees have limited or no liability. They need only to register with the commission, not with Companies House.
According to the Charity Commission, running a CIO should be simpler than establishing a charitable company, although not as straightforward as running an unincorporated association or trust. The commission says the CIO structure is likely to be most beneficial to small to medium-sized charities that employ staff or enter into contracts, but stresses that it will not be suitable for all organisations of this type.
Organisations can apply for registration in line with the following timetable, which the commission says may be subject to change, depending on demand:
- from late March 2013: the window opened for existing unincorporated charities (to set up a CIO and transfer assets into it) with incomes of over £250,000
- from May 2013: the window opens for existing unincorporated charities with incomes between £100,000 and £250,000
- from July 2013: the window opens for existing unincorporated charities with incomes between £25,000 and £100,000
- from October 2013: the window opens for existing unincorporated charities with incomes between £5,000 and £25,000
- from January 2014: the window opens for existing unincorporated charities with incomes less than £5,000 and for brand new charities with anticipated annual incomes of less than £5,000
With the Charity Commission advising any organisation considering an application to register as a CIO to carefully consider the information available on its website before applying, it may also be wise to seek independent professional advice.
At JW Hinks, our wide-ranging experience in working with charities means we are ideally placed to provide guidance on the CIO, to assist charities in assessing the benefits of the structure and deciding whether it is right for them. For more information, please contact us.