A better regulatory framework?
- The CIO provides a simpler incorporation option for charities
- There are two types – ‘foundation’ and ‘association’
- Consider HMRC notification issues
- Proportionate approach to accounting requirements likely
- Likely to be of more use to the ‘smaller’ charities
For the first time in 400 years there is now a legal structure designed exclusively for registered charities. The charitable incorporated organisation (CIO) is intended to provide charities with a practical and effective corporate vehicle and is expected to become available once Parliament approves the final CIO regulations. The Charity Commission has recently published its CIO guidance and model constitutions so there is now an opportunity for people to review whether the CIO will work for them.
As charity trustees become increasingly concerned about the personal financial risks associated with running charities there has been a growing trend towards the use of limited liability companies to try and mitigate personal liability not only for the trustees, but also for any members that a charity may have.