Charitable Incorporated Organisation

A new format for forming and running a charity could become a reality in 2011 - the Charitable Incorporated Organisation.

This new format gives charities the security of a legal entity while removing the duplication of the reporting requirements of Companies House. This in theory should cut administration and accounting costs.

However, this is yet to be passed through Parliament and with a new Government with what is almost certain to be a busy parliamentary period the chances of the CIO seeing the light of day could be slim.

When I first of the CIO I thought it was a wise idea, simply for removing the reporting requirement to Companies House. However there is the very real concern over whether the CIO will be quickly recognised as the entity it is. CIO's will still be registered charities, but they will be a "CIO" and this might deter some people. It will be particularly problematic for those charities that sources funds from overseas where the CIO entity will be unknown.

While moving the framework of the charity from a company limited by guarantee (no share capital) to a Charitable Incorporated Organisation is very appealing, the manner in which it has to be undertaken is not. To move from one to the other the registered charity cannot simply fill a form in or press a button. They have to register the new CIO, then wind up the existing company and transfer all the assets to the CIO. For amateurs and volunteers such as ourselves this might be a bridge too far. We could probably engage an accountant or a solicitor to do the work for us, but at what cost?

Time will tell whether the CIO does become a reality and at that time we will consider long and hard over the long term benefits of moving to the new structure.