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Consultation begins on new Charitable Incorporated Organisation (CIO)

The Office of Third Sector and the Charity Commission launched a consultation period on the Charitable Incorporated Organisation (CIO) on 10 September. This is a new legal entity introduced by the Charities Act 2006. This is the first incorporated legal entity designed specifically with the needs of Charities in mind. Currently, most charities can only incorporate as a company limited by guarantee, meaning they are regulated by both the Charity Commission and Companies House. However a CIO will only be required to register with the Commission, who will also regulate CIOs. The CIO model will provide charities with greater flexibility whilst reducing the burden of regulation.

Further advantages of a CIO as highlighted in the consultation include:

	CIOs will only be required to prepare an annual report under the 1993 Act
	CIOs will only have to send accounts, reports and returns to the Commission
	Simpler requirements relating to the reporting of constitutional and governance changes. CIOs will be subject to a less extensive range of reporting requirements than charitable companies.
	Lower costs. There are no charges by the Commission for registration, and filing of information
	More straightforward arrangements when charities merge or change structure. The 1993 Act contains a number of provisions designed to facilitate merger and restructuring of CIOs which are not available to charitable companies.
	A clear set of duties for charity trustees and members which specifically reflect the charitable nature of the CIO.

Although the CIO structure has a number of benefits, Phil Hope, Minister of the Third Sector has warned that the CIO format may not be suitable for all charities.

This consultation is about the content of Regulations, Orders, and the model constitutions which will provide the detailed legal framework for the operation of the CIO. It is not about the provisions relating to CIOs introduced in the Charities Act 2006, which have already been approved by Parliament.

The consultation period will last for a 13 week period and will close on the 10th December 2008. The Charity Commission welcomes comments from those who may adopt, or work with CIOs. The professional sector and funders are encouraged to provide their views on the consultation document.

Following the consultation period the Office of Third Sector and the Charity Commission will look closely at the responses received, which will enable them to prepare final versions of the Regulations, Orders, model constitutions and the look at the need for future public guidance.

The Office of Third Sector hopes the new structure will be available by next spring, subject to parliamentary process.

For More Information Contact:
Anjli Bhatt
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB

t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk

Email: Anjli

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