Charity lawyers have long advocated a new constitution for charities that would avoid dual regulation. It looked like it would never happen, what with hefty cutbacks at the Charity Commission and difficulties over the detail. But, after much delay, the Minister for Civil Society has now announced that the first Charitable Incorporated Organisations (CIOs) should be established 'from Spring 2011'.

CIOs will probably not suit those that are already established as companies, but it should certainly interest those that are unincorporated, especially if personal liability is a worry. There is no obvious advantage to existing companies in converting, as the reduction in regulatory costs would be outweighed by the cost of conversion. And there is some doubt whether funders and lenders will be ready to accept an unfamiliar and untried vehicle. However, Richard King, partner and head of charities at Tozers LLP comments: "Potentially a CIO does have several advantages for charitable trusts, as compared with the company model: a single regulator, no dealings with Companies House, no filing fees and a tailor-made constitution. If you run an unincorporated charity and are at all concerned about the potential liabilities for trustees, then you should be looking at setting up a CIO. CIOs are not for everyone, but those who employ staff, rent property or enter into other contracts really should consider their position."