UK: Converting Your Charitable Company To A CIO

Last Updated: 16 May 2018
Article by Clare Lawrence and Hayley Marsden

What are the possible pros and cons of using the new process to convert your charitable company to a CIO?


The Charities Act 20111 included provisions for the direct conversion of a charitable company into a charitable incorporated organisation (CIO). However, those provisions required the enactment of further regulations before they would come into force. The wait is now over. As a result of regulations made in 20172, and which come into effect throughout 2018, direct conversion of a charitable company into a CIO is now possible (subject to a phased implementation based on income level). The regulations follow a consultation with the charity sector in 2017, which sought views on the draft regulations.

What is a CIO?

CIOs were introduced in 2013 as a specially designed corporate vehicle for use by charities only. They enjoy the benefit of limited liability, whilst only having one regulator (the Charity Commission), unlike charitable companies which report both to Companies House and the Charity Commission (dual reporting).

A CIO can be either a foundation CIO (the trustees are the same people as the members) or an association CIO (where the membership is wider than its trustees). In contrast to a charitable company, CIOs impose a duty on their members to act in a way which furthers the interests of the CIO.

Why convert?

Possible pros of converting

The largest driver for conversion is expected to be the simplification of reporting procedures – the removal of dual registration means that annual accounts, annual returns and trustees' reports will only need to be filed with one regulator, the Charity Commission. A 'converter CIO' will also be able to keep their existing charity name (subject to the requirements mentioned below) and their existing charity number, which would not previously have been possible if trustees decided to set up a new CIO and transfer the charitable company's assets over. The direct conversion process eliminates the need to set up a new CIO first and transfer all of the assets and undertakings of the old entity to the new CIO.

The Charity Commission's guidance states that conversion should be "simple and straightforward in most cases". Additionally, the guidance anticipates that most contracts, legacies and bank accounts "should" transfer automatically, although this is likely to be dependant upon the particular circumstances.

Possible cons of converting

The Charity Commission does not hold a public register of charges in the same way as Companies House. For those charities with secured borrowings, this may lead to difficulties with lenders who need to register their charge to secure their interest (and ensure their charge ranks in priority on any dissolution).

Companies operate under articles of association, whilst CIOs operate under a constitution, so a new governing document has to be created. Help is at hand in the form of the Charity Commission's model documents, but whilst this might appear to be a simple "lift and shift" job, some provisions (for example, the guarantee) may need additional consideration.

Unlike a company, a CIO is dependent for its existence upon its continuing Charity Commission registration. If for any reason a CIO is de-registered with the Charity Commission it will cease to exist as an entity, whereas a charitable company would continue to exist as an entity provided it remained registered at Companies House.

Who can apply and when?

Some charitable companies have been able to apply since 1 January 2018, depending on their income levels (in accordance with the table below). All charitable companies, regardless of income, will be able to apply to convert from 1 August 2018, with community interest companies anticipated to follow on 1 September 2018.

The list of phased conversion dates can be found here.

Things to consider...

Firstly, that conversion is available to the charitable company in accordance with the Charity Commission's implementation timetable. The charity will also need to ensure that its house is in order before starting the process: among other things, that it is up to date with filing requirements; the register of members is complete and current; and it has undertaken appropriate due diligence including pensions and TUPE.

As a new governing document must be prepared in any event, the opportunity arises to review the charity's current provisions. However, the Charity Commission has cautioned that it would expect to see any "regulated alterations" (to the objects, trustee benefit and dissolution clauses) completed prior to conversion.

Conversion process

The members will need to resolve that conversion to a CIO is in the best interests of the charity, taking into account duties under both company and charity law. Interestingly, the resolution requires a 75% majority on a show of hands, but unanimity on a written resolution. A new CIO constitution must be prepared, approved by the members and registered with the Charity Commission. All the documents, plus a new trustee declaration, will be submitted online to the Charity Commission.

The Charity Commission will undertake various checks on the charity and the application, and will consult with Companies House. If satisfied, it will register the CIO and notify Companies House to remove the charitable company from the register. The date of conversion as shown on the register of charities will match the date of removal from the Companies House register.

It is also worth noting that additional legislation3 enacted around the same time as the new regulations gave CIOs the same protection regarding their name as is given to companies. CIOs are now listed on the register of company names, which helps to prevent anyone establishing either a CIO or a company with a similar name. However, this does mean that CIOs are now caught by provisions relating to 'sensitive names', and those companies wishing to change their name on conversion may find that they need to seek permission from Companies House or other bodies to use certain words (for example "British", "fund", "institute", "society" etc.). Helpfully, "Association", "Charity", "Charitable", "Foundation" and "Trust" are all excluded from this requirement.


[1] S228 – s233 Charities Act 2011

[2] The Charitable Incorporated Organisations (Conversion) Regulations 2017

[3] The Index of Company Names (Listed Bodies) Order 2017

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Fieldfisher LLP
Fieldfisher LLP
Fieldfisher LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Fieldfisher LLP
Fieldfisher LLP
Fieldfisher LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions