New legislation has been released from the Charity Commission, which allows charitable companies and Community Interest Companies to convert to CIOs.
A Charitable Incorporated Organisation, or CIO, is a company structure introduced in 2013 in England and Wales to bring all charities onto a level playing field, regardless of their size and headcount. It was designed to be a much more efficient way of running a charitable venture than a standard charitable company or Community Interest Company (CIC).
Under a CIO, organisations are only required to submit one annual return, rather than two – one for the Charity Commission and one for Companies House. A CIO can also operate as a legal entity in its own right and share many of the benefits associated with being an ordinary business venture. What’s more, smaller charitable incorporated organisations will be able to benefit from a lesser administration burden to prepare receipts and payment accounts that are only filed to the Charity Commission – who do not charge late filing fees or penalties, unlike Companies House.
The CIO structure was universally beneficial and has proved instantly popular. Since its introduction, more than 12,500 CIOs have been registered by the Charity Commission.
Secondary legislation in response to published consultation concerning CIO conversion was laid in Parliament on 13th September 2017. Subject to Parliamentary approval, phased implementation of CIO conversions could begin from January 2018. It remains completely optional, so there is no additional cost or regulatory burden to charities, and those who do convert could experience significant administrative savings.
If your charitable organisation is considering converting to a CIO, then there are a number of things you will need to consider from company registration to tax structure, but Wilkins Kennedy’s Not for Profit team can help. Contact us today for more information.
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