Why should a charity become a CIO?

For unincorporated charities, a big motivation for making the change is limited-liability protection. … The advantage of becoming a CIO for charitable companies is they don’t have to duplicate effort by filing accounts with both Companies House and the Charity Commission – CIOs have to do this only with the commission.

Can a charity convert to a CIO?

Convert a charitable company to a CIO. Charitable companies can use a simple process to change to a Charitable Incorporated Organisation (CIO). Using this process means that the charity continues to exist but in a different form. This means you’ll be able to keep the charity’s existing name and charity number.

What is the difference between a charitable trust and a CIO?

A CIO has its own legal identity, and is liable for its own debts. Trusts are formed by holding assets on behalf of the charity’s beneficiaries, often evidenced and regulated by a trust deed. … Trusts do not have a membership base, but they have trustees who are obliged to act in the best interests of the charity.

What is a CIO in charity?

Charitable Incorporated Organisations (CIOs) are a new form of structure for charities that are just becoming available.

What is the difference between a CIC and a CIO?

Unlike a CIC, a CIO (or Charitable Incorporated Organisation) is a new legal structure introduced for non-profit organisations and charities. With a CIC, you need to apply to Companies House when registering. However, with a CIO, you only need to register with the Charity Commission.

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Should a charity be incorporated?

A charitable trust is not incorporated, so it cannot enter into contracts or own property in its own right. To set up a trust your group must write and sign a trust deed, which must show that the organisation is legally charitable.

Can a CIO employ staff?

A CIO is a corporate body (like a company) that can own property, employ staff and enter into other contracts in its own name (rather than in the names of the trustees). … Members of a CIO may either have no liability at all or (like a company) limited liability for its debts.

What are the benefits of a CIO?

The CIO structure offers important benefits of having separate legal personality and trustee limited liability, and can be seen to be cheaper and easier to set up and administer than a company limited by guarantee.

What are the disadvantages of a CIO?

Centralization. One issue is that having a CIO would mean that information and technology operations are centralized, a big disadvantage for a company that has decentralized its operations. After all, each separate division or project will have its own needs, strengths and opportunities.

Can CIO trustees be paid?

It is a fundamental rule that, except in certain specified circumstances, trustees cannot receive any benefit from the charity. … However, a trustee cannot be paid for performing his or her duties as a trustee, such as participating in trustee meetings. Nor are they allowed to become a paid employee of the charity.