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Detail of outcome
Secondary Legislation to enable charitable companies and Community Interest Companies to convert into CIOs has been laid in Parliament. Subject to Parliamentary approval, phased implementation of CIO conversions could begin from January 2018.
In 2013, the Charitable Incorporated Organisations (CIO) was introduced as a new legal structure to meet the needs of small charities in England and Wales. Since then, it has proved popular with over 12,500 new CIOs registered by the Charity Commission.
These regulations will enable a simple and direct conversion process for charities with a company structure and Community Interest Companies (CICs) looking to change their legal form into a Charitable Incorporated Organisations (CIO.)
The draft Charitable Incorporated Organisations (Consequential Amendments) Order 2017 was laid before Parliament on Thursday 14 September 2017. Subject to Parliamentary approval, the Charitable Incorporated Organisations (Conversion) Regulations 2017, and the Index of Company Names (Listed Bodies) Order 2017, will be laid before Parliament.
The CIO conversion framework imposes no cost burdens on charities or businesses. It is a permissive regulatory framework and will be optional for charities. Organisations who decide to convert (at a small cost) will benefit from annual administrative savings. The Regulatory Policy Committee have validated the estimated equivalent annual net direct cost to business (EANDCB) of -£3.6 million (i.e. an annual de-regulatory benefit of £3.6m). Up to 12,000 small charities are expected to benefit from these changes over ten years. The full Impact Assessment is published above.
Detail of feedback received
We received detailed and valuable feedback, whereby 95% of respondents supported the introduction of the conversion regulations. The responses are published above, and include a provisional timetable for phased implementation.
In 2013, the Charitable Incorporated Organisation (CIO) was introduced as a new legal structure to meet the needs of small charities in England and Wales. Since then it has proved popular with over 6,500 new CIOs registered by the Charity Commission.
Some charities that have been established with the company structure may wish to convert to the CIO structure, and some community interest companies may also wish to become charities and adopt the CIO structure. These draft regulations would provide a simple process for them to do so.
It also sets out a provisional timetable for phased implementation, to assist the Charity Commission in managing anticipated demand for conversions.
The consultation invites feedback on the proposed conversion process, and associated consequential changes.