Charitable Incorporated Organisation structure now available

New charities with an income of more than £5,000 will be able to apply for the new legal structure of charitable incorporated organisation (CIO) from 10 December 2012.

Once the application has been made, groups will have to wait until 3 January 2013 when the relevant regulations are expected to come into force by then.

Charities have been waiting a long time for this new legal form to become available. It was first introduced in the Charities Act 2006 and was supposed to have become available from 2008.

The CIO is a new legal form designed specifically for charities. The structure provides charities with some of the benefits of being a company, without all of the associated burdens. CIOs will be incorporated charities able to enter into contracts in their own right. Their trustees will have limited or no liability. CIOs will be registered and regulated by the Charity Commission and they will not have to register with Companies House.

The Charity Commission has published the following indicative timetable for 2013. Depending on their income, existing unincorporated charities can set up a CIO and transfer assets into it from the following dates:

• Late March 2013: income exceeding £25,000.
• May 2013: income between £100,000 and £250,000.
• July 2013: income between £25,000 and £100,000.
• October 2013: income between £5,000 and £25,000.
• January 2014: income less than £5,000 and brand new charities with anticipated annual incomes of less than £5,000.

Groups wishing to set up a new charity should keep in mind that the CIO structure is most suitable for small-to-medium sized charities, which employ staff or enter into contracts. While running a CIO should be simpler than establishing a charitable company, it will not be as straightforward as running an unincorporated association or trust.

The EMFAN project would like to collect any feedback/views from advisers and voluntary sector groups about the new CIC structure, application process, demand for this and any other issues that have cropped up. We will use this information to address any training or information needs.

Please submit your feedback/views by email at info@emfan.org.uk.