Blake lapthorn Charitable Incorporated Organisations presentation by Elizabeth Davis


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Blake Lapthorn and Community Action Hampshire held a joint event on Friday 9 September on the CIO status.

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Blake lapthorn Charitable Incorporated Organisations presentation by Elizabeth Davis

  1. 1. Charitable Incorporated Organisations 9 September 2011 Elizabeth Davis, Partner, Blake Lapthorn Charities team
  2. 2. Some of our Charities team
  3. 3. Blake Lapthorn Charities team South’s premier full service law firm Top 50 law firm, top 10 national charities team Practical and quality expertise to charities across local, regional and national boundaries Size gives us unrivalled expertise in the sector Actively involved in legal reform and sector support
  4. 4. Key clients
  5. 5. Our charity services Governance and Charity Law Charity Commission and compliance Trustees, staff and volunteers Land and security transactions Fundraising advice Trading and charity shops Building projects and construction advice Partnering, mergers and amalgamations Charity legacy work Academies
  6. 6. Charitable Incorporated Organisations What is a CIO? What are the rules that govern CIOs? Is a CIO right for my charity? What other uses are there for the CIO? What are the benefits of being a CIO? What type of charity would benefit from being a CIO? What do CIOs have to do that is different from unincorporated charities?
  7. 7. What is a CIO? A new legal form for charities incorporated but not a company Created when registered with the Charity Commission Only has to register with the Charity Commission, not Companies House Can enter into contracts in its own name and provides its members and trustees with some protection from liabilities Trustees have limited or no liability for the debts of the CIO
  8. 8. Legislation that will govern CIOs Charities Act 1993 as amended by the Charities Act 2006 General regulations - to be published Insolvency regulations - to be published Charity Tribunal Amendment Order
  9. 9. Choosing the right structure for your charity Trust – deed Unincorporated association - constitution Incorporated, CLG – Memorandum and Articles of Association Charter IPS - Rules In future….CIO - Constitution
  10. 10. Benefits of the CIO over an unincorporated charity Members and trustees have personal safeguards from financial liability A CIO conducts business in its own name A CIO can hold title to land Helps to manage risk if you ….employ staff ….or lease property ….or have to deliver services ….or have other contracts ….or carry out other risk bearing activities
  11. 11. Uses for CIOs Incorporation Collaborative and partnering arrangements Special project vehicles Joint ventures Ringfencing particular areas of risk or liability Holding property separately Primary purpose trading Ancillary charitable activity
  12. 12. Differences from unincorporated charities All CIOs have to register – no financial threshold Registered office in England or Wales Send annual return and accounts to the Charity Commission Keep a register of members and trustees available for public view (on payment of fee if required) Adopt one of two types of constitution – Foundation – Association Amendments not valid until registered Insolvency law applies
  13. 13. Setting up a CIO When will CIOs be available? Phased introduction Adopt constitution, then apply online Required content, model forms not required but recommended
  14. 14. Conversion process for unincorporated charities Set up CIO Transfer assets and undertakings Dissolve the original charity Remove from register Register of mergers
  15. 15. Implications for associations and trusts New charity number Cost of set up and transfer Property Staff Pensions especially defined benefit schemes Permanent endowment Passing resolutions
  16. 16. Converting a company to a CIO No new charity number No transfer of assets and undertaking, staff, property or change of entity Regulations will govern the process of conversion of companies, IPSs and CICs
  17. 17. Setting up a CIO When you can register? How is a new charity formed as a CIO? Can an existing charity convert to a CIO? What are the implications on conversion of an unincorporated charity? How does a charitable company convert? What happens if there is permanent endowment? Can an IPS or a CIC convert? Using a Charity Commission model document
  18. 18. CIO administration Accounts Register of members Register of trustees Amending the constitution Reporting to the Charity Commission Transferring assets from one CIO to another Amalgamating CIOs Winding up a CIO Insolvency
  19. 19. Discussion, questions and comments
  20. 20. Contact us Elizabeth Davis