A joint response to the consultation on plans for a new
type of incorporated charity structure has been published
by The Office of the Third Sector in the Cabinet Office
and the Charity Commission.
The Charitable Incorporated Organisation (CIO) will be the
first incorporated legal structure designed specifically
with the needs of charities in mind.
It will be an entirely new type of charity structure that
will provide charity trustees with protections and responsibilities
similar to those given to directors of limited companies.
Responding to the consultation on how the CIO will work,
the Government and the Charity Commission have agreed to
make a number of important changes to initial proposals
• ensuring a robust, fixed, duty of care – removing
a proposal that CIO trustees could take less responsibility
for their organisation’s activities;
• tightening up rules on access to personal information
in the registers of trustees and members that CIOs will
have to maintain; and
• replacing a number of minor criminal offences for
administrative failings with the power for the Charity Commission
to direct rectification.
Angela Smith, minister for the Third Sector, said: “Charities
make up an important and thriving economic sector, employing
half a million full-time staff and countless volunteers.
"Through the Charities Act 2006, the Government is
completely overhauling the legal framework for the sector
cutting outdated bureaucracy and giving charities the tools
to help make a difference. The CIO is a key part of these
changes, and I’m grateful to those who contributed
to the consultation.”
Dame Suzi Leather, chair of the Charity Commission, said:
“The CIO will combine the advantages of a corporate
structure without the burden of dual regulation. It won’t
be the appropriate form for every charity, but for those
which have decided on incorporation this will be a welcome
new vehicle. I am grateful to all those who responded to
the consultation and helped in the development of the CIO.”
Increasingly, charities are seeking incorporation as a
means of limiting the risk of personal liability for trustees.
Currently, around four in every ten new registered charities
are incorporated as companies, but this brings the burden
of double regulation by both the Charity Commission and
The new CIO will be regulated by the Charity Commission
The aim is for the CIO to become an option for charities
from starting from spring 2010. Both new and existing charities
will be able to consider becoming a CIO, although other
existing forms of incorporation will also remain available.