New legislation for conversion to a Charitable Incorporated Organisation

Following legislation issued on 23 November 2017, charitable companies and Community Interest Companies (CICs) registered in England and Wales will be able to convert directly to a Charitable Incorporated Organisation (CIO) (from 1 January 2018), in accordance with a phased income dependent timetable.

A CIO affords the protection and practicality of incorporated status without the need to meet the dual registration and reporting requirements of both Companies House and the Charity Commission for England and Wales (Charity Commission). The Charity Commission expects many existing incorporated charities will decide to convert over the next decade, and this new process avoids the need to register a new CIO and transfer assets to it when they want to change their structure.

The Charity Commission has published a phased timetable and some points to note.

Phased timetable

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

Points to note

  1. The registration service will only be available from 1 January 2018, and applications will not be accepted before then.
  2. All CIOs will be listed on the business names index held by Companies House – ie consistent with the requirement that all charitable companies are listed at Companies House.
  3. CIOs whose name includes 'sensitive words or expressions' (as defined in The Company, Limited Liability Partnership and Business Names (Sensitive Words and Expressions) Regulations 2014) will require a letter of non-objection from Companies House before registering with the Charity Commission. See Companies House guidance.
  4. Any other changes to the charity such as a change of name, or change in objects, should be kept separate from the transfer process.
  5. Whilst the process should be straightforward and simple in most cases, a new CIO Constitution and Special Resolution will be required. 

RSM recommends charities take legal and accounting advice before embarking on the transfer process.

For further information see the Charity Commission guidance on the CIO conversion timetable.