Blake Lapthorn and Community Action Hampshire held a joint event on Friday 9 September on the CIO status.

1. Charitable Incorporated Organisations
9 September 2011
Elizabeth Davis, Partner, Blake Lapthorn Charities team

2. Some of our Charities team

3. Blake Lapthorn Charities team
South’s premier full service law firm
Top 50 law firm, top 10 national charities team
Practical and quality expertise to charities across
local, regional and national boundaries
Size gives us unrivalled expertise in the sector
Actively involved in legal reform and sector support

4. Key clients

5. Our charity services
Governance and Charity Law
Charity Commission and compliance
Trustees, staff and volunteers
Land and security transactions
Fundraising advice
Trading and charity shops
Building projects and construction advice
Partnering, mergers and amalgamations
Charity legacy work
Academies

6. 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?

7. What is a CIO?
A new legal form for charities incorporated but not a
company
Created when registered with the Charity
Commission
Only has to register with the Charity Commission, not
Companies House
Can enter into contracts in its own name and
provides its members and trustees with some
protection from liabilities
Trustees have limited or no liability for the debts of
the CIO

8. Legislation that will govern CIOs
Charities Act 1993 as amended by the Charities Act
2006
General regulations - to be published
Insolvency regulations - to be published
Charity Tribunal Amendment Order

9. Choosing the right structure for your charity
Trust – deed
Unincorporated association - constitution
Incorporated, CLG – Memorandum and Articles of
Association
Charter
IPS - Rules
In future….CIO - Constitution

10. Benefits of the CIO over an unincorporated charity
Members and trustees have personal safeguards
from financial liability
A CIO conducts business in its own name
A CIO can hold title to land
Helps 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

11. Uses for CIOs
Incorporation
Collaborative and partnering arrangements
Special project vehicles
Joint ventures
Ringfencing particular areas of risk or liability
Holding property separately
Primary purpose trading
Ancillary charitable activity

12. Differences from unincorporated charities
All CIOs have to register – no financial threshold
Registered office in England or Wales
Send annual return and accounts to the Charity Commission
Keep 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 registered
Insolvency law applies

13. Setting up a CIO
When will CIOs be available?
Phased introduction
Adopt constitution, then apply online
Required content, model forms not required but
recommended

14. Conversion process for unincorporated charities
Set up CIO
Transfer assets and undertakings
Dissolve the original charity
Remove from register
Register of mergers

15. Implications for associations and trusts
New charity number
Cost of set up and transfer
Property
Staff
Pensions especially defined benefit schemes
Permanent endowment
Passing resolutions

16. Converting a company to a CIO
No new charity number
No transfer of assets and undertaking, staff, property
or change of entity
Regulations will govern the process of conversion of
companies, IPSs and CICs

17. 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

18. CIO administration
Accounts
Register of members
Register of trustees
Amending the constitution
Reporting to the Charity Commission
Transferring assets from one CIO to another
Amalgamating CIOs
Winding up a CIO
Insolvency

19. Discussion, questions and comments

20. Contact us
Elizabeth Davis
02380857011
elizabeth.davis@bllaw.co.uk