The corporate structure designed specifically for charities

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Charities seeking the benefits of incorporation can currently set up as a company limited by guarantee, but many are put off by the additional administrative burden of dual registration and dual regulation under both charity law and company law.

There is now an eagerly awaited alternative: Charitable Incorporated Organisation ("CIO"), in Welsh Sefydliad Elusennol Corfforedig ("SEC") is a new corporate structure specifically for charities.

The date for the introduction of CIOs has been much delayed. However, in the last year there has been a revival of the push for this new structure to be made available to new and existing charities.  2012 has seen the Charity Commission publish guidance and model constitutions, and the Charity Commission’s Head of Legal Affairs announced at the Charity Law Association’s annual conference in October 2012 that the revised secondary legislation on CIOs will be laid before Parliament in this Autumn session. 

What is a CIO and who will it benefit?

A CIO is standalone legal entity; therefore the charity has its own legal personality and can conduct business in its own name rather than in the name of its trustees.  The CIO will only be subject to charity law and will only be regulated by the Charity Commission. 

Which charities will be able to be incorporated as a CIO and what is the process for doing so?

There will be a phased implementation of the CIO.  The Charity Commission’s timetable is as follows:

New charities

  • January 2013 onwards: CIO available to brand new charities;

Unincorporated charities

  • March 2013 onwards: existing larger charities can incorporate as a CIO (income over £250,000);
  • May 2013 onwards: existing smaller charities can incorporate as a CIO (income over £100,000);
  • July 2013 onwards: any other existing charity can incorporate as a CIO (income below £100,000); and

Company charities

  • January 2014 onwards: existing charitable companies can convert to a CIO.

The process for converting an existing registered charity (in whatever form) into a CIO is not yet contained within the Charities Act 2011 or in the draft secondary legislation.  However, the Charity Commission’s guidance indicates that the process for converting from a trust/incorporated association to a CIO should be much the same as a charity wishing to convert into a charitable company. 

Can an existing charity with permanent endowments transfer the assets to a CIO?

Yes.  Special provisions have been made in the draft regulations to enable charities with permanent endowments to transfer the assets to a CIO by making a vesting declaration. 


The CIO structure will offer charities the benefits of a charitable company without the inherent problems of being subject to company law.  It may be that those larger charities already incorporated as charitable companies will continue to use that structure.  The CIO will be of most relevance, at least initially, to trusts and unincorporated associations whose trustees or members are not currently safeguarded from the charity’s financial risks. 

More information

Should you require more information about CIOs or legal structures available to charities generally, please do not hesitate to contact a member of the Charities team.