The Charitable Incorporated Organisation (CIO) is a new legal structure designed specifically and only for charities. It offers the benefits of limited liability making it easier to recruit and retain trustees, and legal personality making it easier to hold property and enter contracts. However unlike the current incorporated option of the company structure, CIOs will be solely registered with and regulated by the Charity Commission, meaning a reduction in regulation for charities that want the benefits of incorporation. The CIO will add to the range of legal structures which charities can choose to adopt, and is expected to be a popular legal structure, particularly for small to medium sized charities.
Two affirmative draft statutory instruments have been laid in Parliament along with explanatory memoranda:
An impact assessment is also available.
A third statutory instrument will also be required to complete the package: the Charitable Incorporated Organisation (General) Regulations 2012. This cannot be laid in Parliament until the first statutory instruments have been approved, however to inform debate and help people prepare for implementation, a draft copy of these regulations is available below. Subject to Parliamentary approval of the statutory instruments, the first applications to set up CIOs could be made by the end of this year.
Minister for Civil Society, Nick Hurd MP has made a written ministerial statement setting out the proposed timetable for implementation of the CIO (subject to Parliamentary approval of the draft statutory instruments.
The Charity Commission website provides guidance on setting up a CIO, including model constitutions for CIOs.
To help people understand how the Insolvency Act 1986 will apply to CIOs by virtue of the Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations, we have included on this page an informal version of the modified Insolvency Act as it will apply to CIOs. It is provided ‘as is’, for information only, and we cannot guarantee its accuracy.