The Regulator for Charities in England and Wales
(September 2008)
The consultation documents are available on the Office of the Third Sector's website .
A CIO is a new corporate structure designed specifically for charities. It was introduced by the Charities Act 2006 which added provisions to the Charities Act 1993 (‘the 1993 Act’) setting out the basic structure and arrangements for forming a CIO. A CIO must be registered and regulated by the Charity Commission (‘the Commission’) and it only comes into existence once it is registered with the Commission. The CIO model offers charities an alternative to incorporation under company law, and unlike the company law structure will not require ‘dual regulation’ by the Commission and Companies House.
The 1993 Act gives the Minister for the Cabinet Office and the Commission powers to make regulations to complete the legal framework that will govern how CIOs will operate.
We are now planning to use these powers. The Minister has prepared two sets of Regulations and an Order and the Commission has drafted two model constitutions, one for each of the CIO structures. All these documents are attached to the main consultation document as annexes.
As with many of the changes to the 1993 Act, the practical detail is complex. For CIOs, our main challenge is to achieve both administrative ease for charities and sufficient accountability to encourage public trust and the confidence of those who will deal with CIOs.
This consultation has been published jointly by the Commission and the Office of the Third Sector (part of the Cabinet Office). Its purpose is to give the public the opportunity to consider and comment on the proposed content of the Regulations and Order and model constitutions that will provide the framework for running a CIO. The draft documents are described in Section 1 of the main consultation document.
We would, in particular, welcome your views on the specific questions raised at the end of Section 1 of the consultation document. These questions touch on key aspects of the balance between ease of administration and accountability to beneficiaries and the public. The Commission also wants to invite suggestions and comments on the public guidance that it intends to produce on CIOs.
It is important for us all to be confident that the legal framework for the new CIO structure will enable CIOs to operate effectively as charities and is as practical as it can be.
You do not have to read or comment on all parts of the Consultation. For example, the draft Regulations and Order are, by their nature, technical legal documents. You may find all the information you want in the Executive Summary and Background, or you may be more interested in reading about the model constitutions, how a CIO will function in practice and what powers and duties the trustees will have.
These sections
These sections describe the contents of the documents we are consulting on in greater detail. They also provide detailed background information on the questions about the draft Regulations and Order that we are inviting you to comment on.
This section describes the two model constitutions for CIOs that have been drafted by the Commission. One is for the ‘association’ type of charity (has a membership as well as a trustee body) and the other is for the ‘foundation’ type (the only members are the trustees).
The models are designed to contain everything needed for the efficient running of a CIO and the notes in each explain which parts are legal requirements and must be included and which represent good practice.
This section also explains that the Commission will be producing detailed guidance on setting up and operating a CIO. We intend this guidance to enable people interested in setting up a CIO to decide whether the CIO option is the right one for them. This is an opportunity to let us know if there are any other issues that the Commission ought to be covering in its proposed guidance.
These contain the supporting documents that are referred to in the main body of the Consultation and also other background information. They are described in detail in Section 1 of the consultation document.
The consultation will close on the 10th December 2008. The Office of the Third Sector and the Charity Commission will be looking closely at the responses received - they will enable us to prepare the final versions of the Regulations, Order and model constitutions and will also help to decide what needs to be included in future public