Change your charity structure
How to change your charity structure, for example from unincorporated to a CIO or charitable company.
Applies to England and Wales
This guidance is for trustees of charities that want to change structure. For example:
- trusts or unincorporated associations that want to change structure to become Charitable Incorporated Organisations (CIO) or charitable companies. This is sometimes called ‘incorporation’
- charitable companies that want to convert to CIO
You and the other trustees must decide that it is in your charity’s best interests to change to a different structure. Use our decision-making guidance to help you make your decision.
Changing structure almost always requires the Charity Commission’s involvement. Always contact the Commission early, especially if you have a deadline such as the end of the financial year.
Good planning will help you achieve the structure change. For example, think about:
- what actions you will need to take, and in what order. Creating a project plan can help
- whether you have the right powers
- where the process might be complex for your charity, for example if you have permanent endowment, designated land or special trusts
- when you may need professional advice or Commission involvement
You should take appropriate professional advice, for example if your charity has employees: the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) may apply. Changing structure may also trigger pension liabilities.
Rules on reporting and accounting can change as a result of changing structure.
Why change structure
Most charities have one of the following legal structures:
- association CIO
- foundation CIO
- charitable company (limited by guarantee)
- unincorporated association
- trust
Your charity’s legal structure determines:
- who runs it and whether it has members
- whether it can enter into contracts or employ staff in its own name
- whether the personal liability of trustees is limited
- how it holds land and property
Unincorporated charities may decide to change to a CIO or charitable company structure if, for example, the charity:
- changes in size or how it operates
- needs to employ staff
- plans to enter into contracts
This is because an unincorporated charity has no legal personality separate from its members and/or trustees. As a result, it cannot enter into contracts, such as employment contracts, in its own name. The trustees have to enter into contracts personally, and they can be personally liable if something goes wrong.
Charity types: how to choose a structure (CC22a) has more information.
Change your unincorporated charity to a CIO
Trusts or unincorporated associations are unincorporated charities.
Changing from an unincorporated charity to a CIO involves:
- setting up and registering a new CIO
- transferring your charity’s assets and liabilities to the new CIO
- closing your charity after the transfer and after dealing correctly with any permanent endowment, designated land, or special trusts
Get professional advice for any part of the process if you need it.
Understand if you need to tell stakeholders about your plans to change structure. For example, charities or other organisations you work with closely.
1. Before setting up the CIO
Purposes
As the CIO will ‘replace’ your charity, its purposes must be the same as your charity’s purposes. Having the same purposes will give you the legal power to transfer your charity’s assets to the CIO.
If you use this process to review and change your charity’s purposes, do this first, before setting up the CIO. This is because you will need Charity Commission authority to change your charity’s purposes. If the Commission does not provide authority, and you set up the CIO first, you risk the CIO having different purposes to your charity’s purposes.
Read guidance about changing governing documents.
Governing document rules
Check whether your charity’s governing document has particular rules – for example, in its dissolution clause – that should be included in the CIO’s constitution.
Your governing document may set out third party rights. For example, the right of an individual or an organisation to nominate trustees. If it does, you should either:
- include these rights in the CIO constitution, or
- obtain written agreement from the third party to change its rights unless the third party has died (if a person) or no longer exists (if an organisation)
Where the third party is an organisation, check if there is a successor organisation or if it has changed its name.
Membership
If your charity has members, tell them about your plan to change structure. Decisions to:
- change your charity’s purposes
- transfer assets to the CIO and close
may need your members to make decisions, depending on what your charity’s governing document or the law says.
Name of the new CIO
Check the rules about charity names and the extra requirements about the names of CIOs.
2. Set up and register the CIO
You must use one of our model constitutions for CIOs. When you apply to register the CIO, you will need to show what if any changes you make to the model. Your constitution must remain as near to the model as possible.
You should use the association model if your original charity is an unincorporated association. This means it has a:
- constitution as its governing document
- wider membership which votes on important decisions, such as electing trustees
You should use the foundation model if your original charity is a trust. This means it:
- is governed by a trust deed, will, scheme or conveyance
- is run solely by its trustees
- doesn’t have a voting membership
If your charity is an unincorporated association, you should get your members’ consent if you wish to change structure to a CIO foundation.
Then, register the charity.
3. Obtain Charity Commission authority
Understand if you will need Charity Commission authority. You may need authority if, for example:
- the CIO will grant you indemnity for liabilities you incurred as trustees of the unincorporated charity
- the trustees of your charity cannot manage conflicts of interest when deciding to go ahead with the transfer
Read section 4 of our guidance about transferring charity assets for more information about these and other circumstances when you may need authority. It also tells you how to apply.
Apply to the Commission in plenty of time.
4. Transfer assets and liabilities to the CIO
Once you have made decisions to transfer and obtained any authority you need, you should:
- agree a transfer date with the new CIO
The CIO may need to take its own actions (such as setting up bank accounts) before it can receive your charity’s assets and liabilities.
- prepare and execute the correct documentation, such as a pre-merger vesting declaration
Then, on or after the transfer date you have agreed, you can take other actions like transferring funds from your charity’s bank accounts to the CIO’s bank accounts or register the change in ownership of land at the Land Registry.
For guidance about this and, for example, about pre-merger vesting declarations, read section 2 of How to transfer charity assets. It has a template pre-merger vesting declaration you can use.
Designated land, permanent endowment and special trusts
Designated land is land that must be used for a particular purpose of your charity according to the document that explains how the land must be used. For example, property that must be used as a recreation ground.
Permanent endowment is property that your charity must keep rather than spend. Property given to your charity that must be used for a particular purpose (such as designated land) is one example of permanent endowment. Another is money or other assets given to your charity for investment where only the investment income can be spent.
A special trust is money or assets that your charity must use for specific purposes that are narrower than your charity’s purposes. Permanent endowment can be a special trust but not always.
Having, or being trustee of, permanent endowment, designated land or special trusts does not mean you cannot change structure. But you do need to think about how you transfer them because they are different to a charity’s general funds and assets. It also means you cannot close your charity if you do not deal with them correctly.
(General funds or assets can be used in any way to further your charity’s purposes; they have no other rules on how they can be used.)
Read section 3 of our guidance about transferring charity assets to understand how to transfer permanent endowment, designated land and special trusts.
5. Close the original charity
Once you have:
- transferred all your assets and liabilities to the CIO
- dealt with any permanent endowment, designated land or special trusts
- passed your charity’s records to the new CIO
you can close the charity.
Read guidance about closing your charity.
You must tell the Commission about the closure so we can remove your charity from the register. We will also stop writing to you – for example to file annual returns.
Register of merged charities
Changing structure is a form of merger. Consider if you can, or must, register the merger.
Registering is about helping charities secure future gifts (such as bequests) after they have merged and closed.
Read guidance for more information and how to apply.
Convert your charitable company to a CIO
Registered charitable companies can apply to the Commission and use a simple legal process to convert to a CIO, which means that the charity continues to exist but in a different form.
You should be able to keep the charity’s existing name and keep its charity number. You should also be able to keep the charity’s existing bank accounts.
In most cases the new CIO should receive any gifts left to the original charitable company.
Following conversion, your charity will face different reporting and accounting requirements. See guidance at the end of this section.
Get professional advice if you need it.
1. Choosing the correct model constitution
You must use one of our model constitutions for CIOs. When you apply to the Commission, you will need to show if you have made any changes to the model. Your CIO constitution must remain as near to the model as possible.
You should use the model that reflects your current structure:
- use the association model if in your charitable company there is a separate voting membership
- use the foundation model if in your charitable company the directors are the only members
You should also understand who the first members of the CIO will be. The persons who were members of the company immediately before the conversion to CIO will become the first members of the CIO.
2. Purposes
As the CIO will ‘replace’ your charitable company, its purposes must be the same as your charity’s purposes.
If you use this process to review and change the purposes of your charitable company, do this first, before applying for conversion. This is because you will need Charity Commission authority to change your charity’s purposes. If you do not, and the Commission does not provide authority, you risk the CIO having different purposes to your charity.
Understand the rules on changing governing documents.
3. Checks before submitting your application
Use this checklist before making your application. We will not progress any application where any of these issues apply but have not been addressed.
| Before you apply | Check |
|---|---|
| Is your charity exempt and therefore not registered with the Commission? | If it is exempt, you cannot use this legal process to ‘convert’ the charitable company to a CIO. |
| Are you up to date with Companies House and Charity Commission filing requirements? | For example, accounts and any changes to registered details. |
| Has your company issued any shares? | This is quite rare for charitable companies, but if it has, these must be fully paid up. |
| What is the liability of company members if it winds up? | If it requires payment of more than £10, this will need to be the same, or greater, for the new CIO. If it requires £10 or less, this is extinguished upon conversion. |
| Check the proposed name of the CIO. | You cannot use the word ‘limited’ in the CIO’s name. |
| Check the provisions in your articles and in your CIO constitution allowing benefits and payments to the charity trustees. | If you are not changing the model clauses about trustee payments in your CIO constitution, you can go ahead and apply for conversion. It doesn’t matter if the model clauses do not match what your articles say. However, if you have changed the model clauses, and if the provisions in your company’s articles are more restrictive than the provisions in the CIO constitution, you will need to either: • change the CIO provisions to match what your articles say. Show these changes in the CIO constitution when you apply for conversion; or • change your articles to match the CIO provisions, and where needed obtain the Commission’s authority for these changes before you apply for conversion. Read guidance about changing your company’s articles. |
| Check the provisions about who receives any remaining funds if the charity is dissolved. | If the dissolution provisions in the CIO constitution will change how your charity’s property will be used after closure, you will need to either: • change the CIO provisions to match what your articles say. Show these changes in the CIO constitution; or • change your articles to match the CIO provisions, and where needed obtain the Commission’s authority for these changes before you apply for conversion Read guidance about changing your company’s articles. |
| Is your charity a private registered provider of social housing? | If it is, you must tell the Regulator of Social Housing about the proposed conversion before applying to the Commission. |
4. Decision-making
The trustees of the charitable company make the decision to convert to CIO and to adopt the proposed CIO constitution.
Then, members of the charitable company must pass two resolutions:
- the first on the decision to convert to a CIO and
- the second on the decision to adopt the proposed constitution of the CIO
The first of these members’ resolutions must be:
- a special resolution passed in line with the rules of your articles or
- a special resolution of at least 75% of your company’s members present and voting at a general meeting passed in line with company law or
- a unanimous written resolution signed by or on behalf of all the members of the company who would be entitled to vote on a special resolution
Pass the second resolution in accordance with the rules in your articles.
Your member resolutions must include your company number and should include your charity number.
5. Apply to the Charity Commission
You will need to include the following information in your application.
- Copies of the members’ resolutions mentioned above.
- A copy of the proposed CIO constitution. Show any changes you have made to the model constitution and explain why you have made them.
- Show what changes you have made, if any, to the clauses in the model constitution about how the new CIO’s constitution could be changed in future. For example, if your provisions require a higher than usual percentage of your charity’s members to vote to change the constitution.
- A completed Trustee Declaration Form.
- If your charity is a private registered provider of social housing, you must include a statement confirming that you have notified the Regulator of Social Housing of the proposed conversion.
6. Charity Commission decision
We will check:
- whether the CIO meets the legal requirement to be registered
- your declaration that trustees are eligible to serve (they aren’t disqualified)
- that the main and working name of the CIO cannot be confused with that of another charity and is not misleading or offensive
- any changes made to the model constitution
- that your company is up to date with all filing requirements with Companies House and the Commission
- that, from our enquiries with Companies House, there is no reason to think that registering the conversion would be inappropriate. For example, if your company is not being dissolved, in liquidation or in administrative receivership, or has any active legal proceedings against it
If we are satisfied, we will:
- register the CIO; this converts the charitable company to the CIO
- inform Companies House, so that it can remove the charitable company from the register of companies
The Commission’s registration is provisional until the charitable company is removed from the register of companies.
We will tell you when the conversion of your charity to a CIO is complete.
After conversion, you should:
- tell HMRC about the conversion, if your charity is registered with HMRC
- apply to Land Registry to change your charity’s details, if your charity owns land or property
- take any other practical steps in relation to your charity’s assets
If we refuse your application we will explain why and the process for asking us to review our decision.
Rules about accounting and reporting
Following conversion, the rules in Part 4 of the Charities Act 2011 apply to your charity. This includes if conversion takes place part way through your charity’s financial year.
Change your unincorporated charity to a charitable company
Trusts or unincorporated associations are unincorporated charities.
Changing from an unincorporated charity to a charitable company involves:
- setting up a new charitable company
- transferring your charity’s assets and liabilities to the new charitable company
- closing your charity after the transfer and after dealing correctly with any permanent endowment, designated land, or special trusts
Get professional advice for any part of the process if you need it.
Understand if you need to tell stakeholders about your plans to change structure. For example, charities or other organisations you work with closely.
1. Before setting up the charitable company
Purposes
As the charitable company will ‘replace’ your charity, its purposes must be the same as your charity’s purposes. Having the same purposes will give you the legal power to transfer your charity’s assets to the charitable company.
If you use this process to review and change your charity’s purpose, do this first, before setting up the company. This is because you will need Charity Commission authority to change your charity’s purposes. If the Commission does not provide authority, and you set up the charitable company first, you risk the company having different purposes to your charity’s purposes.
Read guidance about changing governing documents.
Governing document rules
You should check whether your charity’s governing document has particular rules – for example, in its dissolution clause – that should be included in the new company’s articles.
Your governing document may set out third party rights. For example, the right of an individual or an organisation to nominate trustees. If it does, you should either:
- include these rights in the company’s articles, or
- obtain written agreement from the third party to change its rights unless the third party has died (if a person) or no longer exists (if an organisation).
Where the third party is an organisation, check if there is a successor organisation or if it has changed its name.
Membership
If your charity has members, tell them about your plan to change structure. Decisions to:
- change your charity’s purposes
- transfer assets to the charitable company and close
may need your members to make decisions, depending on what your charity’s governing document or the law says.
Name of the new charitable company
Check rules about charity names and the extra requirements for the names of charitable companies.
2. Register the charitable company
Register the new company with Companies House.
Check if you must register the charitable company with the Commission.
3. Obtain any Charity Commission authority you need
Understand if you will need Charity Commission authority. You may need authority if, for example:
- the charitable company will grant you indemnity for liabilities you incurred as trustees of the unincorporated charity
- the trustees of your charity cannot manage conflicts of interest when deciding to go ahead with the transfer
- you will transfer a substantial non-cash asset
Read section 4 of our guidance about transferring charity assets for more information about these and other circumstances when authority may be needed (including what is a ‘substantial non-cash asset’).
It also explains how to apply for authority. Apply to the Commission in plenty of time.
4. Transfer assets and liabilities to the charitable company
Once you have made decisions to transfer, and obtained any Commission authority you need, you should:
- agree a transfer date with the new company
The company may need to take its own actions (such as setting up bank accounts) before it can receive your charity’s assets and liabilities.
- prepare and execute the correct documentation, such as a pre-merger vesting declaration or transfer agreement
Then, on or after the transfer date you have agreed, you can take other actions such as transferring funds from your charity’s bank accounts to the company’s bank accounts or register the change in ownership of land at the Land Registry.
For guidance about this and, for example, about pre-merger vesting declarations and transfer agreements, read section 2 of How to transfer charity assets.
Designated land, permanent endowment and special trusts
Designated land is land that must be used for a particular purpose of your charity according to the document that explains how the land must be used. For example, property that must be used as a recreation ground.
Permanent endowment is property that your charity must keep rather than spend. Property given to your charity that must be used for a particular purpose (such as designated land) is one example of permanent endowment. Another is money or other assets given to your charity for investment where only the investment income can be spent.
A special trust is money or assets that your charity must use for specific purposes that are narrower than your charity’s purposes. Permanent endowment can be a special trust but not always.
Having, or being trustee of, permanent endowment, designated land or special trusts does not mean you cannot change structure.
But you do need to think about how you transfer them because they are different to a charity’s general funds and assets. It also means you cannot close your charity if you do not deal with them correctly.
(General funds or assets can be used in any way to further your charity’s purposes; they have no other rules on how they can be used.)
Read section 3 of our guidance about transferring charity assets to understand how to transfer permanent endowment, designated land and special trusts.
5. Close the original charity
Once you have:
- transferred all your assets and liabilities to the charitable company
- dealt with any permanent endowment, designated land or special trusts
- passed your charity’s records to the charitable company
you can close the charity.
Read guidance about closing your charity.
You must tell the Commission about the closure so we can remove your charity from the register. We will also stop writing to you – for example to file annual returns.
Rules about reporting and accounting
When you change from an unincorporated charity to a charitable company, you will face different rules on reporting and accounting. Charitable companies are required to prepare and file accounts in line with company law as well as charity law. This means that you must prepare accrual accounts for the charitable company and these must comply with Charities SORP FRS 102.
Register of merged charities
Changing structure is a form of merger. Consider if you can, or must, register the merger.
Registering is about helping charities secure future gifts (such as bequests) after they have merged and closed.
Read guidance for more information and how to apply.
Other types of change
This guidance does not cover a change of structure to a Royal Charter charity. Read our guidance about Royal Charter charities.
Changing from incorporated to unincorporated charity
You can change a charitable company or CIO to an unincorporated charity by reversing the process. However, this is an unusual step and you should be able to show how doing this is in your charity’s best interests, especially if your charity has contracts or assets such as land.
If you do go ahead, any land or other assets that the charity owns cannot be transferred straight across to the new, unincorporated charity. Instead vest land in the trustees or the Official Custodian, and other assets to the trustees to hold on trust.
Conversions involving charities and Community Interest Companies (CICs)
Read Community Interest Companies: benefits of a CIC for the differences between CICs and charities.
You can change a CIC into a charity by setting up a new charity, transferring the CIC’s assets to it, then closing the CIC.
Read guidance about converting a CIC to a charity, or a charity to a CIC.
A CIC can convert directly into a CIO.
Get professional advice if you need it.
Change a Registered Society to a CIO
The process is similar to that of changing a charitable company to a CIO. Get professional advice if you need it.
Updates to this page
Last updated 7 March 2024 + show all updates
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Guidance updated to reflect changes introduced by the Charities Act 2022.
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Guidance updated to reflect changes introduced by the Charities Act 2022.
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Added translation
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Updated information in the 'Convert a charitable company to a CIO' section about Companies House requirements. You need approval from Companies House to use a sensitive word in your CIO name before we can authorise a conversion.
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Updated the section 'convert a charitable company to a CIO’. Resolutions must contain the company number and the charity number or the conversion request will be rejected.
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Added link to guidance on converting from a Community Interest Company to a charitable incorporated organisation.
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Section about converting a charitable company to a CIO has been updated - in line with legislative changes from January 2018.
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First published.