First set of charitable companies can now convert to CIOs

Those with annual incomes of less than £12,500 can convert from this week, and organisations with higher incomes will be allowed to convert in phases thereafter

Photograph: Shutterstock
Photograph: Shutterstock

Charitable companies with annual incomes of less than £12,500 have this week become the first to be made eligible to convert to charitable incorporated organisations.

The CIO legal form, which was included in the Charities Act 2006 but not introduced until 2013 after significant delays, allows charities to enter into contracts as corporate entities with limited liability for trustees and members.

Any charity that wanted to convert to CIO status previously had to wind up their old organisation and start a new CIO.

But parliament passed legislation in November to enable charities with company structures and community interest companies to convert simply to CIOs, speeding up the process.

The conversion process is being introduced on a phased basis, starting with the smallest charities from this week.

Date Annual income
1 January 2018 Less than £12,500
1 March 2018  Between £12,500 and £25,000
1 May 2018 £25,000 and £100,000
1 June 2018  £100,000 and £250,000
1 July 2018 £250,000 and £500,000
1 August 2018 Greater than £500,000

Guidance produced by the Charity Commission, which regulates as well as registers CIOs, says the conversion process "should be simple and straightforward in most cases".

The new legislation also means all CIOs will from this week be listed on the business names index, held by Companies House, that will protect CIO names in the event of others looking to set up companies with similar titles.

More than 12,500 new CIOs have been registered with the Charity Commission since 2013.

The regulator’s guidance on how to change a charity’s structure can be found here.

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