Most charities planning to become CIOs

More than 70 per cent of charities are planning to convert to charitable incorporated organisations when the legal form becomes available, according to a client poll by law firm Rollits.

The CIO form is expected to be available as a model in 2008, after guidance and consultation. It is the first legal structure designed specifically for charities and will offer charitable organisations the benefits of incorporation without the need to register with two regulators – Companies House and the Charity Commission.

The provision is likely to prove particularly popular with unincorporated charities that want to limit trustees’ liability. The Charities Act 2006, for which the CIO was devised, contains specific conversion provisions to this end.

“Clearly, trustees are keen to protect themselves from potential liabilities as they carry out their duties on the boards of charities,” said Gerry Morrison, senior solicitor at Rollits. “The CIO will be suitable for most charities but probably not all.”

Charities should seek legal advice to ensure they choose the structure best suited to their need. Another lawyer, Benjamin James of law firm Bircham Dyson Bell, warned in October that charities wishing to incorporate should not wait for the CIO because it was an untested formula (Third Sector, 3 October).

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