Since 2 January 2013 new charities have been able to register as a Charitable Incorporated Organisation (CIO).
Prior to that date the only way to be an incorporated charity was to form a limited company, registered at Companies House, and then apply for charity registration with the Charity Commission. This approach meaning that there were two sets of laws to comply with and two separate annual filings.
The CIO is registered solely with the Charity Commission and subject to charity law only.
This was a long-awaited and very welcome change to the law.
There was however one sticking point and that was for a charity that had already registered as a limited company and now wanted to benefit from the updated legislation. The only way forward was to set up a new CIO and transfer the old charity over.
New legislation was published on 23 November allowing charitable companies, in England and Wales, to convert to CIOs. There will be a phased implementation: Charities with income below £12,500 will be able to apply from 1 January 2018 and those with income greater than £500,000 from 1 August 2018. There are four other income bands that fit in to the intervening period.
It has been stated in official releases that the process should be “simple and straightforward in most cases”. The charity will need to adopt a new CIO constitution and pass a Special resolution to convert.
It appears that procedures have been put in place for the Charity Commission and Companies House to liaise with each other so that the date of conversion is consistent between both regulators.
If you wish to discuss this further then please get in touch on 0116 2423400
Neil Ford, Technical Manager