A new form of incorporated body to be used for charitable purposes has come into being via a framework set out in the Charities Act 2006. Known as a Charitable Incorporated Organisation (CIO), this is a legal entity but needs only to be registered with the Charity Commission (or the Office of the Scottish Charity Regulator in Scotland) and not with Companies House. However, members and trustees will still enjoy limited liability for the debts of a CIO and it will be able to act in its own right, in a similar manner to a limited company.

Whether to use this structure will be a matter for careful consideration as there are disadvantages as well as advantages. Some types of existing charitable entity, such as guarantee companies, can be converted to CIOs but other types will need to effect a transfer of assets into an existing CIO. All CIOs, regardless of size, will need to register with the Charity Commission, provide accounts and annual returns, keep registers of members and trustees (the latter available for public inspection), file amendments to their constitution with the Charity Commission and comply with insolvency law.

There are two model forms of constitution published by the Charity Commission – the foundation model in which all the members are trustees and the association model, suitable for a wider membership, in which all the members are not necessarily trustees. Regulations governing the running and dissolution of CIOs have not yet been debated in Parliament and so we do not yet know exactly when they will be available for use and the details are liable to be changed.