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Blake Lapthorn and Community Action Hampshire held a joint event on Friday 9 September on the CIO status.
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Charitable Incorporated Organisations
9 September 2011
Elizabeth Davis, Partner, Blake Lapthorn Charities team
Some of our Charities team
Blake Lapthorn Charities team
South’s premier full service law firm Top 50 law firm, top 10 national charities teamPractical and quality expertise to charities across local, regional and national boundariesSize gives us unrivalled expertise in the sectorActively involved in legal reform and sector support
Key clients
Our charity services
Governance and Charity LawCharity Commission and complianceTrustees, staff and volunteersLand and security transactionsFundraising adviceTrading and charity shopsBuilding projects and construction advicePartnering, mergers and amalgamationsCharity legacy workAcademies
Charitable Incorporated Organisations
What is a CIO?What are the rules that govern CIOs? Is a CIO right for my charity?What other uses are there for the CIO?What are the benefits of being a CIO? What type of charity would benefit from being a CIO?What do CIOs have to do that is different from unincorporated charities?
What is a CIO?
A new legal form for charities incorporated but not a companyCreated when registered with the Charity CommissionOnly has to register with the Charity Commission, not Companies HouseCan enter into contracts in its own name and provides its members and trustees with some protection from liabilitiesTrustees have limited or no liability for the debts of the CIO
Legislation that will govern CIOs
Charities Act 1993 as amended by the Charities Act 2006General regulations - to be publishedInsolvency regulations - to be publishedCharity Tribunal Amendment Order
Trust – deedUnincorporated association - constitutionIncorporated, CLG – Memorandum and Articles of AssociationCharterIPS - RulesIn future….CIO - Constitution
Choosing the right structure for your charity
Benefits of the CIO over an unincorporated charity
Members and trustees have personal safeguards from financial liabilityA CIO conducts business in its own nameA CIO can hold title to landHelps to manage risk if you ….employ staff….or lease property….or have to deliver services….or have other contracts….or carry out other risk bearing activities
Uses for CIOs
IncorporationCollaborative and partnering arrangementsSpecial project vehiclesJoint venturesRingfencing particular areas of risk or liabilityHolding property separatelyPrimary purpose tradingAncillary charitable activity
Differences from unincorporated charities
All CIOs have to register – no financial thresholdRegistered office in England or WalesSend annual return and accounts to the Charity CommissionKeep a register of members and trustees available for public view (on payment of fee if required)Adopt one of two types of constitution– Foundation– Association
Amendments not valid until registeredInsolvency law applies
Setting up a CIO
When will CIOs be available?Phased introductionAdopt constitution, then apply onlineRequired content, model forms not required but recommended
Conversion process for unincorporated charities
Set up CIOTransfer assets and undertakingsDissolve the original charityRemove from registerRegister of mergers
Implications for associations and trusts
New charity numberCost of set up and transferPropertyStaffPensions especially defined benefit schemesPermanent endowmentPassing resolutions
Converting a company to a CIO
No new charity numberNo transfer of assets and undertaking, staff, property or change of entityRegulations will govern the process of conversion of companies, IPSs and CICs
Setting up a CIO
When you can register?How is a new charity formed as a CIO?Can an existing charity convert to a CIO?What are the implications on conversion of an unincorporated charity?How does a charitable company convert?What happens if there is permanent endowment?Can an IPS or a CIC convert?Using a Charity Commission model document
CIO administration
AccountsRegister of membersRegister of trusteesAmending the constitutionReporting to the Charity CommissionTransferring assets from one CIO to anotherAmalgamating CIOsWinding up a CIOInsolvency
Discussion, questions and comments
