To register with the Charity Commission of England and Wales the principal registered office must be situated in either England or Wales and the CIO will be required to submit an annual return and accounts to the Charity Commission regardless of its income level.Charitable Incorporated Organisations have to keep a register of trustees which is available for inspection, as well as one for members.
As the process is more complicated we would suggest that legal advice is sought as there will be additional issues such as staff contracts and pension arrangements.For existing charitable companies, the provisions of the Charities Act 2006 allow them to convert directly to a Charitable Incorporated Organisation and this is expected to be a more straightforward process. Guidance on this can be found in The Charity Commission’s guidelines for Charities and Trading (CC35). Amendments to the constitution will need to be registered with the Charity Commission before they become valid and in some cases the Charity Commission will need to give prior consent to the changes. Charitable Incorporated Organisations (CIOs) are now the most popular form for establishing new charities – this extensively updated second edition illustrates the benefits of the structure, as well as the pitfalls. © 2020 MHA Henderson Loggie A Charitable Incorporated Organisation is a legal entity and can enter into contracts in its own right. Email: thirdsectorsupport@haymarket.com. The CIO structure has several benefits over unincorporated charities and charities that are limited companies:Every charity has different circumstances and the items below may not necessarily be judged by you to be a drawback but nonetheless Written resolutions of the Trustees can only be passed unanimously, unlike a company limited by guarantee which is more flexible. Therefore, if an organisation is concerned about how the law of public benefit is evolving and its application by the Charity Commission, a CIO may not be suitable at present. Registration will be regardless of income levels and because of this a CIO cannot therefore be an exempt charity.
Key Guides: Charitable Incorporated Organisations.
Accounts and Annual Returns will only need to be filed with the Charity Commission and there are currently no filing fees or late filing penalties for this, unlike Companies House.The Charity Commission will register all new Charitable Incorporated Organisations. Creating a charitable foundation enables you to decide which causes you ultimately want your donations going to. The CIO is intended to provide the benefits of incorporation to registered charities within a more attractive legal framework that is regulated purely by the Charity … The model constitutions have been designed to make the process simple for charities although the trustees may need to seek legal advice if they wish to tailor their constitution.For existing unincorporated charities, the Charities Act 2006 does not allow for conversion to a Charitable Incorporated Organisation. Once the Charitable Incorporated Organisation is in place, the old charity can then transfer the assets and undertakings to the CIO.
For the first time in 400 years there is now a legal structure designed exclusively for registered charities. Organisations in the first category are Foundation CIOs and those in the second category are Association CIOs.
Henderson Loggie LLP trading as MHA Henderson Loggie is a member of MHA and the global network of Baker Tilly International Ltd, the members of which are separate and independent legal entities. CIOs do not need to register with Companies House and are not subject to company law. These charities also have limited liability for debts or lawsuits. This article covers the CIO structure generally, the types of CIO available, how to establish a CIO, an overview of the Charity Commission’s model governing documents for CIOs and the advantages and disadvantages of adopting the structure. Equally, they can only be removed from the CIO register by their dissolution as they cannot exist outside of the regulatory framework.So, if the CIO legal form is subsequently found to be unsuitable for the charity, the only apparent course of action is to transfer the assets to another charity with similar objects to the CIO and then dissolve the CIO. mortgages over CIO property. 1.
A Foundation CIO should be easier to administer than an Association CIO. It may also hold property in its own name which has advantages with regard to succession of the charity. What are the benefits of being a Charitable Incorporated Organisation? Reset password: Click here. A Charitable Incorporated Organisation (CIO) is a corporate form of business designed for (and only available to) charitable organisations in the United Kingdom.CIO status is conferred by the Charity Commission on application by a charity, whether new or existing..
Contrast this with the current situation for an unincorporated charity where the members and trustees remain personally liable for such debts, property has to be held in the name of the trustees and trustees must undertake transactions on behalf of the charity. The “Charitable Incorporated Organisation” or “CIO” is intended to provide charities with a practical and effective incorporated vehicle. Charitable Incorporated Organisations or CIOs are a relatively new legal structure available for charities or charitable groups that wish to be incorporated. If your charity is likely to want to issue debentures, a company limited by guarantee will be a better option for you.