By Kim Sanders, White Stone
Charitable incorporated organisations (CIOs) are a new form of legal entity. In England and Wales, a CIO will be created when it is registered by the Charity Commission and the act of registration will also confer charitable status. A CIO will be able to enter into contracts in its own right and its trustees will normally have limited liability.
Slow progress
CIOs were introduced by the 2006 Charities Act, although secondary legislation is needed before they can actually be used. This legislation was promised for spring 2010, but the General Election dashed these hopes. The Coalition Government has now picked up the baton and in November 2010 Nick Hurd, minister for civil society, announced that CIOs would be available in the spring of this year. But, as spring merges into summer, the legislation has not been forthcoming.
However, the Charity Commission has been making progress. It has made guidance notes and model CIO constitutions available on its website for those who may be considering a CIO as an option. Although the documents may be subject to change (to make sure that they are consistent with the final regulations passed by Parliament), they provide a good basis for planning for the future.
Scotland streaks ahead
Meanwhile, the first Scottish charitable incorporated organisation (SCIO) has been incorporated. South Seeds, a charity based in Govanhill, Glasgow was incorporated on 12 April 2011.
The SCIO has been available to those applying for charitable status in Scotland since 1 April 2011 and for charitable trusts converting to SCIO status. (The legislation for companies converting to SCIOs does not come into force until 1 January 2012.)
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