Counting down to the CIO
September 2008
The next stage in the development of the Charitable Incorporated Organisation (CIO) structure will start with the launch of the consultation due on 9 September.
This will focus on key details, including the additional rules needed to create an effectively operating structure both in terms of administration and in achieving objectives.
Two sets of regulations are involved; the first to cover the general rules and the second to cover what happens when a CIO ceases to exist, whether through insolvency or by being wound up. The Minister will also amend the rules about which of the Commission’s decisions can be taken to the Charity Tribunal to include some involving CIOs. The Office of the Third Sector will be consulting about these.
The other parts of the new regime for CIOs are two new forms of model governing documents. These will be model constitutions, one for a foundation-type CIO with no membership structure and the other for an association-type of CIO with members. The Commission is responsible for these constitutions and this part of the consultation; CIOs will usually be expected to use one of these constitutions, which will contain all the necessary provisions.
The proposals aim to balance the need for CIOs to be simple and attractive to charities with the need for the legal framework to be robust for business purposes. A balance also needs to be achieved between imposed constitutional arrangements and the need for constitutional flexibility.
The consultation will be seeking views on issues including what public information about the CIO should be available, how charges over CIO property should be registered, how to amend the constitution, how trustee benefits and conflicts of interest should be handled and what accounting arrangements CIOs should have. While these are largely technical questions, the consultation also aims to answer key questions around setting up as a CIO or converting from an existing charity.
However, the consultation will not be looking at the parts of the framework already set out in the Charities Act 2006 as these are already part of the law.
Those interested in the CIO or seeking an opportunity to comment on the detailed plans for the structure and administrative arrangements can see the consultation when it is published on 9 September on the OTS and Charity Commission’s websites.
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