The Charity Commission says it remains to be convinced that industrial and provident societies that pay dividends on share capital to non-charities should be allowed to retain their charitable status.
From 2009, larger societies will have to register with the commission rather than being automatically designated as exempt charities, on the condition that they meet the Financial Services Authority's community benefit criteria. But talks between the commission and the FSA, which began earlier this year (19 March, page 7), have failed to resolve the impasse over share issuing.
A spokesman for the commission said: "It is a fundamental principle of charity law that a charity cannot distribute profits to a non-charity. We have made this view clear to the FSA and lawyers specialising in IPSs, and are yet to receive any counter argument."
