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Charitable Conversions

Community Interest Companies (CICs) now have the option of converting into a Charitable Incorporated Structure (CIO). This offers potential benefits for charitable organisations, including more relaxed reporting and compliance requirements.

At Glanvilles, we have a team of charity law experts with experience advising charities of all sizes across a range of sectors. If you are thinking of converting a charity to CIO status, we can discuss the implications and ensure that the correct process is followed.

We have the expertise to give you the guidance and representation necessary to put the right foundation in place for your organisation. This is a complex area of law and our team will work with you to ensure that all aspects of the conversion, such as pension implications and funding issues, are dealt with appropriately.

As well as exceptional legal expertise in the charities sector, our team provides an outstanding service. We will make sure that you have a solicitor with the right level of expertise for your needs and that you are able to speak to us as needed during the conversion process.

Get in touch with our charitable conversion solicitors

You can contact our experienced charity conversion solicitors in West Sussex and Hampshire at your local branch in ChichesterFarehamHavant or Petworth.

Alternatively, you can fill in our online enquiry form and a member of our team will be in touch shortly.

How we can help with charitable conversions

Our charities lawyers provide a full service for converting charities, including:

  • Advice on whether converting from a CIC to a charity CIO is the right option for your organisation, including looking at CIO vs CICs and the potential benefits of each
  • Drafting charitable constitutions
  • Amending articles of association where necessary
  • Making the application to convert your Community Interest Company to a Charitable Incorporated Organisation
  • Dealing with associated issues such as employment and other contracts, property registration, accounts and pension implications
  • Ongoing charity law advice and representation

What is a charitable conversion?

There are four main charity structures in the UK:

  • Charitable company
  • Charitable Incorporated Organisation (CIO)
  • Charitable trust
  • Unincorporated charitable association

A charitable conversion is the changing of the existing charity structure.

Converting a charitable company to a Charitable Incorporated Organisation allows a charity to keep a similar structure to a company but without the need to follow company legislation as closely.

Benefits of converting a charitable company to a CIO

Looking at a Charitable Incorporated Organisation vs a charity set up as a company, the main benefit is a reduction in paperwork.

After conversion to a CIO, a charity will no longer need to file accounts with Companies House or go through the lengthy director verification process as it will be solely regulated by the Charity Commissioner.

A simpler method of accounting can be used, rather than dealing with matters on the basis of accruals, as required by Companies House.

The personal financial liability of those involved with the charity is also reduced under the CIO format, as trustees will not be personally liable for any debts that the charity has.

Because the structure is a separate legal entity, it is still able to enter into contracts and own property in its name, rather than the names of trustees. This means that the benefits of a company structure are retained but with less bureaucracy and a lower risk to trustees.

How do you convert a CIC to a charity CIO?

To convert a CIC to a charity CIO, you need to comply with the eligibility criteria and then apply to the Charity Commission (the Commission) to convert.

This includes providing the Commission with a new constitution and two resolutions passed by members:

  • A resolution agreeing to apply to convert to a CIO
  • A resolution adopting the draft constitution

A declaration that the trustees are eligible is also required.

If the Commission agrees to the conversion, the CIC will be removed from the Companies House register.

As well as the work carried out by the Commission, you will also need to deal with the transfer of paperwork, contracts, employees, pensions, property and other matters into the name of the new CIO. It is important that the correct procedures are followed in dealing with these issues to avoid legal complications in the future.

Our team routinely represent charities in dealing with the conversion process to a CIO and we can work with your organisation to ensure all matters are dealt with comprehensively.

How to convert a private limited company to a CIC

If you have a company that is not currently a charity, you may want to convert it into a Community Interest Company. This includes dealing with Companies House, HMRC and the Office of the Regulator of Community Interest Companies.

We can advise you on the process, which involves providing articles of association, a company conversion declaration and a resolution agreeing to the conversion. We will also work with you to establish that this is the best option for your organisation and discuss the implications of conversion.

What other charity conversions are possible?

As well as looking at CIO vs CIC, it is also possible to change the structure of a charity or to convert most types of company to a charitable structure, subject to eligibility. We can discuss your needs and what you want to achieve, ensuring that you have the right foundation for your charity and that you are able to carry out the activities you want.

What companies cannot be converted?

Unincorporated organisations cannot be converted, and you would need to start a charity registration from scratch.

When converting a company, you will need to keep to the same structure. For example, if your company is limited by guarantee, then when you convert, your CIC will also need to be limited by guarantee.

What is the conversion process from CIC to CIO?

The main steps in the conversion process from CIC to CIO are as follows:

  • The members of the CIC must pass a resolution agreeing to convert to a CIO
  • A constitution needs to be adopted. The Charity Commission has a range of model CIO constitutions available to be used as templates
  • A resolution must be passed adopting the constitution
  • An application to register as a charity is made

Why choose Glanvilles for charitable conversion?

Our charities team has worked with a range of organisations to convert them to CIO status, including advice on dealing with ancillary issues such as employees, property and pensions and discussing the implications of a Charitable Incorporated Organisation vs a charity run as a charity company.

We have the attention to detail needed to ensure that the conversion goes smoothly and that a sound legal foundation is put in place for the future. We will ensure that your organisation has the ability to carry out the activities it intends and we can also advise on ongoing issues such as compliance and financial reporting.

We will take the time to get to know your organisation to ensure that the advice we offer takes into account both your current situation and the way in which you hope to operate in the future.

The Glanvilles’ client service promise

When you use our services, we promise:

  • Our staff will be friendly, respectful and attentive.
  • Your concerns will be listened to, your questions answered, and your options explained in plain English.
  • The cost of dealing with your requirements will be made clear to you from the outset.
  • We will answer your phone calls and emails promptly.
  • We will keep you regularly updated at all times.

Contact our charitable conversion solicitors

You can contact our experienced charity conversion solicitors in West Sussex and Hampshire at your local branch in ChichesterFarehamHavant or Petworth.

Alternatively, you can fill in our online enquiry form and a member of our team will be in touch shortly.