Charity Commission publishes guidance on charitable incorporated organisations

By Kaye Wiggins, Third Sector Online, 25 March 2011

Charity Commission

Charity Commission

Legal form will allow charities to be corporate entities without registering with Companies House

The Charity Commission has published guidance on the charitable incorporated organisation legal form, which was introduced by the Charities Act 2006 but has not yet been brought into force.

The form will allow charities to be incorporated organisations that are not companies, meaning they will need to register with the Charity Commission but not with Companies House.

The 2006 act introduced the form, but secondary legislation is needed in order for it to be used. No date has been set for it to start.

Sam Younger, chief executive of the Charity Commission, said the guidance had been produced now so that charities interested in using the CIO form could "look more closely at whether the CIO structure is the right one for their needs, and what will be involved.

"The guidance will help ensure people are clear about what being a CIO would mean ahead of the new structure being implemented."

Younger said the commission’s guidance would be added to over the next few months and might be altered once parliament agreed the secondary legislation that would allow the form to be used.

The guidance includes two models for the governance of a CIO – a foundation model under which the only voting members would be the charity trustees, and an association model for charities that have a wider, voting membership.

It says trustees of a CIO will normally have limited or no liability for its debts.

A statement from the commission said new organisations would be the first to be able to register as CIOs, and existing charities would be able to convert to CIOs at a later stage.

A spokeswoman for the Office for Civil Society said the legislation enabling CIOs to be created would be introduced "later this year" but declined to be more specific.

Nick Hurd, the Minister for Civil Society, said in November that he expected the first CIOs to be set up this spring.

The commission’s guidance covers foundation and association models.

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