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Cancel proposed CIOs

Comment 17th July 2010

For some years the concept of the CIO (Charitable Incorporated Organisation) has been under development. Before the Companies Act 2006 came into force there were good arguments in favour of CIOs. However the new Act simplified the legal operational requirements of small company charities and, as a result, there is no longer any need for CIOs.

The argument in favour of CIOs is that this new form of charity will only be accountable to the Charity Commission and not Companies House. For charities however the accountability to Companies House is not onerous. 

There are other arguments in favour of abandoning the new charity form. We do not know whether the new form will be 'fit for purpose', and the signs are that it may not be. 

We are charity specialists advising some thousands of trustees across the UK. Our advice, if CIOs do come into being is that we would want to see them well bedded in before deciding whether we can recommend them. This feeling is probably common amongst many charity advisers.



Why does this matter?

1.It will save charities a good deal of money, time and effort. The advent of CIOs will give work to accountants, solicitors, advisers, trainers, etc, and all this will cost charities funds which could usefully be employed elsewhere.

2. CIOs will not provide any material benefit to charities and the public.


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