Charitable companies with an income of under £12,500 can now convert to CIOs
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18 January, 2018
Charitable companies with an income of under £12,500 can now convert to a Charitable Incorporated Organisation (CIO), and the Government has issued a timetable for the staggered introduction of this opportunity for larger organisations.
What is a CIO?
CIO stands for ‘Charitable Incorporated Organisation’. The ‘incorporated’ aspect means that the organisation forms a corporate body. So, the law covers your charity in much the same way as it would an individual. This gives your charity the legal capacity to do many of the same things (in its own name) that a person can, such as:
- Employing paid staff
- Entering into contracts to deliver charitable services
- Entering into commercial contracts in its own name
- Owning freehold or leasehold land or other property
Generally the trustees and members (if there are any) aren’t personally liable for what the CIO does.
There are different types of CIOs. Check the Charity Commission’s guidelines to find out more.
How has the legislation changed?
Previously, any charity that wanted to convert to a CIO had to close their organisation and then open a new CIO.
In November, Parliament passed legislation which simplified the conversion process, making it much quicker for a Community Interest Company (CIC) to change to a CIO.
From 1st January 2018, all CIOs will be listed on the business names index, held by Companies House, that will protect the names of CIOs in the event of others looking to set up companies with similar titles.
What is the timetable for organisations with an income over £12,500?
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
Voscur's support service can help you chose an organisational structure. Conatct us here. https://www.voscur.org/services/support/advice
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