When it was introduced five years ago the Charitable Incorporated Organisation (CIO) form of charity caused some nervousness, it was new, the legal infrastructure was untested and the queue to form one was not long.
Now it has become the default form for new charity application, because it is well proven and the advantages are so strong. I would always advocate, these days, that a group wanting a charity registration should do so as a CIO rather than as a traditional registered charity.
I would also advocate that those trustees which are running traditional unincorporated charities should consider becoming CIOs instead. Despite having to pass through a few bureaucratic hoops, it is a straightforward business and we at Colebridge have now supported a few of these conversions.
The main advantage is limited liability for trustees without having the separate burden of registering as a Companies and having to account annually to two regulators – the Charities Commission and Companies House.
In our increasingly litigation happy society, trustees face increasing risks of personal liability unless they are suitably protection and the protection that comes from incorporation cannot be undervalued.
This year the facility for charities incorporated as companies to convert to CIOs has been introduced. Whilst it is not a well worn path as yet, the option of moving under just one regulator has its attractions and Trustee/Directors could do well to include a consideration of the step onto their agendas.
If you want to know more, do get in touch in me – email@example.com.