Scottish Government consults on regulation of charitable incorporated organisations

Responses are sought by February next year

Scottish Parliament
Scottish Parliament

The Scottish Government has launched a consultation on how tightly Scottish charitable incorporated organisations should be regulated.

The SCIO will be a new legal form aimed at charities with incomes of between £25,000 and £1m that want to acquire a legal personality and relieve their trustees of personal liability, but do not want to become charitable companies and be subject to the full range of company law.

Provisions for the creation of SCIOs were included in the Charities and Trustee Investment (Scotland) Act 2005, but a committee of experts began meeting only last year to advise the Scottish Government on how they should be implemented.

The committee proposes to build on existing charity law and add flexible additional provisions specific to SCIOs. It advises against basing SCIOs on company law, which would impose too much of an administrative burden on small charities.

But it says unincorporated organisations should not be able to convert to SCIOs without any extra regulation because this would not promote confidence in SCIOs among potential investors.

The consultation, which runs until 26 February, also asks for views on other aspects of SCIOs, including conversation, accountancy and insolvency arrangements. The new form is likely to be available from late next year or early 2011.

English CIO legislation is being redrafted after a consultation found that many respondents thought draft regulations drew too heavily on company law.

The Scottish consultation document says it would help if the differences between English and Scottish CIOs were minimised. "But the ultimate design of each regime must be tailored to the specific context within which it will operate," it says.

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The consultation

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