Parliament approves CIO conversion for incorporated charities

Houses of Parliament courtesy of UK GovParliament has agreed changes to enable incorporated charities and community interest companies to become charitable incorporated organisations and the process will begin in January.

Parliamentary copyright images are reproduced with the permission of Parliament

Civil Society writes:

A delegated legislation committee… agreed to amendments that were set out in an order earlier this autumn. The Charity Commission has now set out a timetable and guidance for incorporated charities which wish to convert. CIOs are a relatively new legal form, which were introduced by the Charities Act 2011. They have become a popular legal form for new charities as they offer the protections of incorporated status without having to register and file with Companies House as well as the Charity Commission, with over half of new charities opting to be a CIO.

New organisations have been able to register as CIOs since 2013 and unincorporated charities have been able to convert since 2014. But up until now incorporated charities have not been able to become CIOs. The motion to permit CIO conversion for incorporated charities was moved by Tracey Crouch, minister for civil society, who told the committee that it is ‘the only legal structure designed just for charities’ and was popular with charities because it is ‘subject to a single regulator regime under the Charity Commission, rather than a dual regulatory regime under both the Charity Commission and Companies House’.  She added that: ‘To help manage demand the Charity Commission has proposed phasing the availability of the conversion process…’

…The Charity Commission has now published guidance for charities wishing to convert and a timetable of when they will be able to do so.  Charitable companies with incomes under £12,500 will be able to begin the conversion process from January 2018, with all charitable companies expected to be able to convert by August.  The process for converting community interest companies will then begin in September 2018.

The Commission has published guidance on its website and said: ‘The Commission will liaise with Companies House to ensure that necessary records are updated correctly. This will mean that the date of conversion of the charitable company to a CIO – as shown on the public register of charities – will match the date of removal of the charitable company at Companies House.’

Read more…. and view the Charity Commission Guidance

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