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Posted 29 November 2017

Update on the CIO ‘Quick Conversion’

In my blog ‘Will CIOs dominate the Charity Sector?’ I reported on the proposed ‘quick conversion’ process for companies and CICs (non-charitable Community Interest Companies) to become Charitable Incorporated Organisations (CIOs). Today, we are able to share the official timeframes issued by the Charity Commission, along with a few other updates.

Conversion Process

To recap, the CIO structure has been very successful for unincorporated charities – it offers the benefits of incorporation without regulation by Companies House. CIOs are simpler and cheaper to operate than companies are. Now the conversion is being offered to existing companies.

We have however questioned their suitability in some circumstances. We also question the likely uptake of conversion. Is the reduced regulation worth the cost, time and effort? It is best to talk to a professional advisor if you are considering conversion.

The conversion service will begin from 1 January 2018 (applications prior to this date will be disregarded). It will then follow the phased implementation timetable (according to charity income) as detailed below.

DateAnnual income
1 January 2018Less than £12,500
1 March 2018Between £12,500 and £25,000
1 May 2018Between £25,000 and £100,000
1 June 2018Between £100,000 and £250,000
1 July 2018Between £250,000 and £500,000
1 August 2018Greater than £500,000

If you wish to convert, you will need to have a new CIO constitution drafted and a special resolution adopting the new constitution. These will need to be provided to the Commission upon application.

Many charities might want to use the opportunity to make other changes such as a change in name or charitable objects. However, the Commission has stated this it will not make concurrent changes as part of the application process. These must be made separately, either before or after.

Naming your CIO

All CIOs are to be included in the Registrars’ Business Names Index (maintained by Companies House) and will be also subject to ‘sensitive words or expressions’ restrictions.

From 1 January 2018, CIO names will appear alongside the names of companies (and other entities) when searching Companies House in an effort to prevent duplication or confusion and a letter of ‘non-objection’ will need to be obtained from Companies House when a prospective CIO wishes to include ‘sensitive words or expressions’ in its name such as ‘King’, ‘Bank’ or ‘Britain’. It is however recommended by the Charity Commission that any application from 1 December 2017 (but not sooner) follows these requirements to allow for any processing delay.

If you are considering a CIO structure for your charity, give our charities team a call on 01392 207020.

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