Steady rise in volume of CIO conversions and start ups
9 October 2017 by Ellen Petersen
I have been struck recently by the amount of charity clients that are looking to change the structure of the charity they represent, to a Charitable Incorporated Organisation (CIO).
The volume of clients now going through the conversion process should come as no surprise, given that provision for CIO status was included in the Charities Act 2011 and introduced as a legal structure in 2013.
Registering as a CIO allows an organisation to avoid dual regulation by Companies House and the Charity Commission, as it is only subject to Charity Commission oversight. It can also enter into contracts with no or limited liability for trustees. These proposals set out in 2013, were particularly attractive to new charities, looking to be overseen by a less severe compliance regime, as was hitherto, available.
Implementation of the 2013 structure was however delayed by the requirement for new regulations. Following Government consultation in 2016, existing charities have been able to convert – previously, the process was limited to the registration of new CIOs.
I work together with Ashton Carter, who deals with the formal conversion paperwork, advising the client on compliance, structure and so on, while I draft the property-related documents. It should also be noted that in some situations, Charity Commission approval will be necessary in the CIO conversion process.