The government is this month expected to make an announcement on a new legal form for charities. In anticipation of this John Maddocks, CIPFA’s Third Sector Technical Manager, has welcomed the benefits that this will bring to third sector organisations.
Previously, the charitable incorporated organisation (CIO) legal form had only been available in Scotland. The CIO offers the advantages of a corporate structure such as reduced personal liability while removing some of the regulatory complexity. The CIO registers with the charity regulator and is not regulated by Companies House and company law.
John Maddocks commented,
“The Charity Commission suggests that a CIO will be most suitable for small to medium-sized organisations that employ staff and enter into contracts. For those wanting an incorporated form it offers simpler simpler accounting and reporting especially where gross income is £250,000 or less, as well as lower administrative and filing costs.
“It is perhaps a legal form for our times, one that makes life a little easier for new enterprises able to embrace charitable purposes; and one that balances regulatory and reporting requirements with a simpler way for getting new charitable enterprises up and running, while retaining the benefits of a corporate structure.”
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