Posted by Paul Daniels, Partner
Consultation on CIO proposals
The Charity Commission is currently consulting on plans which would enable third sector organisations to become incorporated structures.
It is thought that providing the option for existing charities and community interest companies (CICs) to become Charitable Incorporated Organisations (CIO) could help them to cut red tape.
CIOs were first introduced three years ago and have proven a popular framework, with more than a quarter of new charities being registered opting for this structure.
Now plans are being drafted which would allow charities already in existence to adopt the same arrangement.
At present, charities which want to make the transition have to set up a new CIO, transfer the assets across and then wind up the original organisation.
This can be a long and time-consuming process and many charities choose not to go through with it as a result.
The Government hopes that implementing a proper system for charities to convert will make things easier.
Voluntary sector academic Gareth Morgan welcomed the idea of allowing existing charities to become CIOs, acknowledging it would reduce the regulatory burden for many small and medium-sized organisations.
However, he warned that certain requirements of the conversion process were “excessive” and suggested there were some aspects which should be given further consideration.
The consultation ran until June 10th.
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