25 Charitable incorporated organisationThe charitable incorporated organisation (CIO) is the only legal structure created exclusively as a framework for charities. It has become popular for new charities, especially those of small to medium size, and to replace unincorporated charities. Most CIOs use one of the two forms of model constitution prescribed by the Charity Commission1.The charitable company limited by guarantee has a particular advantage over the simple trust in circumstances where the trustees might be exposed to third-party liability since the company is a legal entity separate from its members and directors, and the charity trustees2 as the directors of the company are protected from such personal liability. However, a disadvantage of the company limited by guarantee is that it subjects the charitable organisation to registration as both a charity and a company and with it the dual control and supervision of the Charity Commission and Companies House.The CIO was one of the recommendations to emerge from the Report of the Strategy Unit3. As a corporate structure, the CIO was seen as a means of enhancing the protection of the charity trustees by putting them in much the same position as the directors of a company but without the requirement to be registered at Companies House and the additional regulation and supervision imposed by company law. The CIO
The charitable incorporated organisation (CIO) is the only legal structure created exclusively as a framework for charities. It has become popular for new charities, especially those of small to medium size, and to replace unincorporated charities. Most CIOs use one of the two forms of model constitution prescribed by the Charity Commission1.
The charitable company limited by guarantee has a particular advantage over the simple trust in circumstances where the trustees might be exposed to third-party liability since the company is a legal entity separate from its members and directors, and the charity trustees2 as the directors of the company are protected from such personal liability. However, a disadvantage of the company limited by guarantee is that it subjects the charitable organisation to registration as both a charity and a company and with it the dual control and supervision of the Charity Commission and Companies House.
The CIO was one of the recommendations to emerge from the Report of the Strategy Unit3. As a corporate structure, the CIO was seen as a means of enhancing the protection of the charity trustees by putting them in much the same position as the directors of a company but without the requirement to be registered at Companies House and the additional regulation and supervision imposed by company law. The CIO
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