Incorporated charities will be able to become charitable incorporated organisations (CIO’s) from January pending approval.

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Secondary Legislation to enable charitable companies and Community Interest Companies to convert into CIOs has been laid in Parliament. Subject to Parliamentary approval, phased implementation of CIO conversions could begin from January 2018.

Background

In 2013, the Charitable Incorporated Organisations (CIO) was introduced as a new legal structure to meet the needs of small charities in England and Wales. Since then, it has proved popular with over 12,500 new CIOs registered by the Charity Commission.

These regulations will enable a simple and direct conversion process for charities with a company structure and Community Interest Companies (CICs) looking to change their legal form into a Charitable Incorporated Organisations (CIO.)

The draft Charitable Incorporated Organisations (Consequential Amendments) Order 2017 was laid before Parliament on Thursday 14 September 2017. Subject to Parliamentary approval, the Charitable Incorporated Organisations (Conversion) Regulations 2017, and the Index of Company Names (Listed Bodies) Order 2017 will be laid before Parliament.

Impact Assessment

The CIO conversion framework imposes no cost burdens on charities or businesses. It is a permissive regulatory framework and will be optional for charities. Organisations who decide to convert (at a small cost) will benefit from annual administrative savings. The Regulatory Policy Committee have validated the estimated equivalent annual net direct cost to business (EANDCB) of -£3.6 million (i.e. an annual de-regulatory benefit of £3.6m). Up to 12,000 small charities are expected to benefit from these changes over ten years.

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