Further to our March posting, two draft statutory instruments needed to give effect to CIOs were laid before Parliament on 30 October.
A further statutory instrument will be required before charities can apply to become CIOs, but subject to parliamentary approval of the complete package of statutory instruments, it is anticipated that the first applications to become CIOs could be made by the end of this year.
The CIO is a new corporate structure giving charities the benefits of limited liability while reducing the amount of regulation to which they are subject.
Currently, charities seeking the benefits of incorporation may set up as a company limited by guarantee. But as this means being subject to registration and regulation under both charity and company law, many charities do not opt to do this. CIOs, however, will be solely registered with and regulated by the Charity Commission.
To help the Charity Commission manage anticipated demand, implementation is to be phased. The indicative timetable may be viewed here.
Interestingly, those charities currently incorporated as companies limited by guarantee will only be allowed to convert to CIOs during 2014 if Parliament approves separate conversion regulations in the meantime.
So it seems that those student unions that are currently incorporated as companies limited by guarantee will have some time to wait before they can benefit from becoming a CIO.
Guest contribution by:
Catherine Fawlk, Senior Solicitor
+(44)(0)121 456 8287