A charitable incorporated organisation represents an innovative operating model for charitable ventures that allows them to incorporate and function similarly to a company, but without requiring joint regulation by both the Charity Commission and Companies House.

The main attribute of a CIO is that it has legal personality and limited liability, meaning the organisation can conduct business in its own name, and its members and trustees will not be held personally liable in the event of financial loss.

Administered solely by the Charity Commission, CIOs operate under two main models. Foundation CIOs have closed memberships, meaning their voting members and charity trustees are the same group of individuals, whereas association CIOs offer open membership, and can be joined by members who are not trustees.

Establishing a CIO as a new charity means setting out a charitable constitution in line with Charity Commission guidelines, and applying online with the necessary documentation. If the constitution meets the Commission’s standards for charitable goals and the proposed name of the organisation is approved, the CIO can be successfully registered.

How can I convert a corporate charitable company into a CIO?
Charitable companies can convert into a CIO while maintaining its existing name and charity number, as well as carrying over its current bank accounts and any legacies left to the original charitable company.

The company will need to apply to the Charity Commission through a resolution passed by all of the charity’s relevant decision-makers, with a copy of the constitution and a declaration of the eligibility of the proposed trustees. If these checks are passed, Companies House will remove the charity from its register of companies, and the organisation will formally become a CIO.

If the pre-existing charity has not been incorporated, it will be necessary to register a CIO from scratch and then transfer the original charity’s assets to it.

This can be a legally complex process - the original charity’s governing document may not allow you to give away all its assets, for example, while trustees who are affiliated with both the old and new organisation may encounter conflicts of interest. When these issues arise, direct adjudication and approval from the Charity Commission may be needed.

It is highly advisable to seek legal advice when converting an unincorporated charity into a CIO, in order to make the process as smooth as possible.

Compared to other charity organisational structures, CIOs are able to simplify various processes and mitigate key risks for members and trustees.

CIOs are only required to deal with the Charity Commission as their regulator, whereas a limited company charity would also be expected to file accounts with Companies House.

Because it has a legal personality of its own and can conduct business in its own name, trustees will not need to make themselves personally responsible for the organisation’s decisions, as is the case with an unincorporated charity. Members and trustees will also be personally protected from any financial and contractual liabilities incurred by a CIO in most cases.