We're a charitable company. How do we become a CIO?

England and Wales: This page sets out the conversion route in full. Scotland: a different statute and a different regulator — a Scottish charitable company can become a SCIO by its own conversion route, but OSCR must consent and can refuse; see the Scotland section below. Northern Ireland: not available — the CIO form does not exist in Northern Ireland.

Charitable company to CIO: nothing transfers, liabilities included

A charitable company that becomes a CIO does not hand anything over to anyone. It is the same legal person in a new form. That is one half of the rule.

This page assumes the board has agreed that the structure is the problem and has checked which amendment route your charity uses. How a CIO compares with the other structures is set out in legal structures compared.

The Charity Commission’s guidance says the charity “continues to exist but in a different form”. It adds that 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”.

Gifts left to the company take effect as gifts to the CIO. Then you tell HMRC and update any Land Registry entries. Those are updates to records about the same body, not transfers of ownership.

Now the other half, which matters as much. In England and Wales, the Charities Act 2011 says so in terms. Section 233(4), verbatim:

“The conversion of a company… into a CIO does not affect, in particular, any liability to which the company… was subject.”

A charity that converts to escape a liability has misread the rule. There is no transfer step for a debt to fall through. The lease, the loan, the claim and the contract all belong to the same charity, which carries on. “Nothing transfers” means nothing is left behind, either.

How this differs from the unincorporated route

A charitable company converts. An unincorporated charity cannot. It has to transfer everything to a new CIO. Much sector content calls both routes “converting to a CIO”. This table sets the two side by side.

	A charitable company	An unincorporated charity
What happens	The same legal person changes form	A new charity is born and the old one closes
Assets	Stay where they are	Each one has to be transferred
Liabilities	Stay with the same charity	Need arrangements before the old charity closes
Bank accounts	Kept	The new CIO sets up its own
Old legacies	Take effect as gifts to the CIO	Protected only if the merger is registered

If your charity is not a company, this page is not yours. Read We’re an unincorporated charity. How do we become a CIO? instead. And do not set up the transfers, new accounts and merger registration that page describes. A company does not need them.

What you file, and in what order

In England and Wales, two laws set the route. They are the Charities Act 2011, sections 228 to 234, and the Charitable Incorporated Organisations (Conversion) Regulations 2017. The route runs through two regulators in one sequence:

1. The members pass a special resolution to convert, or a unanimous written resolution.
2. They adopt a CIO constitution. Section 228 requires it to follow the Commission’s model, or be “as near to that form as possible”.
3. The company applies to the Commission with both resolutions, the constitution and the prescribed documents.
4. The Commission checks eligibility. The 2017 Regulations look for no filing defaults, no open civil or criminal proceedings, no dissolution or liquidation, and no disqualified director.
5. The Commission registers the CIO provisionally. It is not final yet.
6. Companies House cancels the company’s registration. Only then is the conversion complete.
7. You update HMRC and the Land Registry, as record changes about the same legal person.

Clear the eligibility points before you apply. An overdue filing at Companies House is the kind of thing that stops the process at step 4. The filings are listed in file with Companies House.

What happens to the members’ guarantee?

For most small charities, it is extinguished on conversion. Most charitable companies are limited by guarantee. Each member promised a small sum towards the debts if the company was wound up. Nobody has thought about it since the articles were signed.

Conversion makes you look. Take a company limited by guarantee in England and Wales. Section 228 says the guarantee carries across to the CIO at the same amount or more. The exception is a guarantee at or below a small statutory floor. That kind is extinguished on conversion. Most small charities’ guarantees sit at that level.

The floor is set in section 228 itself, which applies in England and Wales. The figure is not yet one this guide can print from its own data. So check it at legislation.gov.uk against your articles.

Can a CIO convert back to a company?

No. Conversion runs one way. In England and Wales, the Charities Act 2011 has routes into a CIO and none out of one. Here is the Commission’s list of possible routes, read field by field:

From	To	Statutory route?
Charitable company	CIO
CIO	Charitable company

To reverse it later, you would form a new company, transfer every asset to it and wind up the CIO. That is the long process this route lets you avoid. Say it out loud in the board meeting before the members vote.

Scotland: the same conversion, but OSCR can say no

In Scotland the route comes from the Charities and Trustee Investment (Scotland) Act 2005, sections 56 to 58. A charitable company or registered society applies to OSCR to become a SCIO. It needs a special resolution, or a unanimous written one, to convert and another to adopt the constitution.

The effect is the same as in England and Wales. The registrar then registers the documents and cancels the company. From then on, the same legal person continues as a SCIO. Section 58 says all its property, rights and liabilities become the SCIO’s.

The difference is consent. In England and Wales, the Commission does not consent to a company-to-CIO conversion at all. It registers it once the tests are met.

In Scotland, section 57 of the 2005 Act is OSCR’s own consent gateway. OSCR must consult the Registrar of Companies, or the FCA for a society. It can refuse even where the eligibility tests are met.

That gateway is separate from OSCR’s general consent power in section 16 of the 2005 Act. Section 16(3)(b) switches that power off here. Do not follow OSCR’s section 16 guidance for this.

If the conversion is one part of a wider plan, go back to diagnose what actually needs to change. If the plan is to join another charity instead, start with assess whether a merger is the right answer.

Common mistake: converting to leave a liability behind

“Nothing transfers” gets read as “the debts stay with the old company”. They do not. The Charities Act 2011 s.233(4) applies in England and Wales. It says the conversion “does not affect, in particular, any liability to which the company… was subject”. There is no transfer step because the body has not changed.

Common mistake: setting up transfers, new accounts and legacy protection as if this were a new charity

Sector content calls both routes “converting to a CIO”. So companies copy the unincorporated checklist. None of it is needed here. The name, the charity number and the accounts stay. Gifts left to the company take effect as gifts to the CIO. HMRC and Land Registry changes are record updates, not transfers.

Common mistake: assuming the conversion can be reversed later

People assume routes like this run both ways. This one does not. There is no statutory route from a CIO back to a company. Reversal would mean a new company, a full transfer and winding up the CIO.

Common mistake: overlooking the members’ winding-up guarantee

Take a company limited by guarantee in England and Wales. Section 228 requires the guarantee to carry across at the same or a greater amount. The exception is a guarantee at or below the small statutory floor in section 228. At that level it is extinguished on conversion. Read your articles before you draft the CIO constitution.

Worked example

Saltmarsh Trust is a charitable company with a trading subsidiary. Its trustees decide to become a CIO.

The members pass a special resolution to convert. They pass a second one adopting a constitution on the Commission’s model. Before applying, the company secretary checks the eligibility points. Every Companies House filing is up to date. There are no open proceedings. No director is disqualified. The application goes to the Commission.

The Commission registers the CIO provisionally. Companies House then cancels the company’s registration. The conversion is final.

Nothing moves. Saltmarsh keeps its name, number and bank accounts. The subsidiary’s shares, every contract and every liability stay with the same legal person, now in CIO form. The trustees update HMRC and the Land Registry entries for the building.

The outcome: a registered CIO, with the company’s registration cancelled — two regulators, one sequence.