The Office of the Third Sector has today published its response to the Consultation on the Charitable Incorporated Organisation.

The consultation closed on 8 December 2008 and, since then, the OTS and the Charity Commission have continued work to finalise implementing legislation bringing into force the Charitable Incorporated Organisation as an alternative legal structure for charities, currently scheduled for 2010.

Amongst the conclusions reached by the OTS, it has been decided that charities will not be able to derogate from a fixed duty of care owed by trustees, that CIOs will be required to keep a register of members in the same way as a Companies Act company and that the minimum age for trustees of a CIO will be maintained at 16 years of age.

There is as yet no solution to the more onerous requirements for approval of a written resolution by a CIO, which under the Charities Act must be passed unanimously. The requirements for written resolutions to be passed by companies limited by shares or guarantee were relaxed under the Companies Act 2006 so that only a 50 or 75 per cent. majority is required.

The full paper can be accessed here:

http://www.cabinetoffice.gov.uk/media/270880/summary%20of%20consultation%20responses%20and%

The advantages to charities using an incorporated entity rather than operating as a trust or unincorporated association include limiting the personal liability of individual trustees and members for matters such as trading liabilities, claw-back of grant funding and operational risks, as well as ensuring that assets of the charity do not need to be transferred between nominee owners on death or retirement of a trustee.

If you would like to discuss how we can help your charity operate through a company limited by guarantee or other incorporated structure, please contact our charities team for an initial consultation:

Posted: September 17th, 2009 under Charities and Social Enterprises Group.
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