Service Areas: Commercial, Company Law, Charities
Introduction of Charitable Incorporated Organisations (CIOs)
The Charities Act 2006 raised the notion of Charitable Incorporated Organisations (CIOs). Recent consultations have now considered the introduction of CIO’s this year. In light of the potential change James Tarling examines the mechanism of a CIO.
A new corporate entity known as a ‘Charitable Incorporated Organisation’ will be introduced in early 2009 as an alternative to a company limited by guarantee.
Proposals include a single registration with the Charities Commission, less onerous requirements for preparing accounts, less onerous filing requirements and more straightforward arrangements for merger and reconstruction. This will ensure that any costs incurred are significantly reduced, and is an attractive alternative to a company limited by guarantee.
Charitable organisations will be able to register as a CIO and will be regulated by the Charity Commission only. This should be significantly more convenient than the current position whereby companies limited by guarantee are regulated by both the Companies Act and the Charity Commission. Existing charitable companies can convert by re-registration. The conversion process should not affect the organisation's legal personality or its business relationships.
A consultation document entitled 'The Charitable Incorporated Organisation (CIO) Consultation on the New Corporate Form for Charities' has been published by the Charities Commission and the Office of the Third Sector. Details of which can be found at the link below.
The closing date for responses was 10 December 2008 and the Charity Commission have yet to publish the responses and replies so watch this space…
http://www.cabinetoffice.gov.uk/third_sector/consultations/completed_consultations/cio.aspx
If you require advice on any of the issues raised in this article please contact James Tarling or another member of our company commercial team at commercial@steeleslaw.co.uk or on 01603 598000.
Published:
24 February 2009