Which legal structure should my charity have?

Applies in: England and Wales · Scotland · Northern Ireland. This page sets out England and Wales in full, across all six forms. Scotland: partly covered — the SCIO provisions cross-checked here are established, but Scots trust law and OSCR’s own structure material are not established here. Northern Ireland: partly covered — what is established is which forms exist there, and that the CIO does not; the trustee-age and incorporation-of-the-trustee-body points below are thinner.

This page compares the forms. You make and minute the decision when you choose your legal structure. That assumes you have already decided whether to start a charity rather than one of the alternatives to setting up a charity.

What founders are rarely told about charity legal structures

1. There is no statutory route to convert a CIO or SCIO into another legal form. Conversion runs one way only: into the CIO or SCIO, never out. To leave, you transfer the undertaking to a new body and dissolve the old one. You get none of the automatic vesting a statutory conversion gives you.

No single provision says this. It is shown by what the law leaves out, and the evidence is the shape of the legislation. Charities Act 2011 Part 11 Chapter 4 is headed “Conversion, amalgamation and transfer”. Under it:

• the conversion cross-heading is “Conversion of certain bodies to CIO”, and covers applications by a charitable company, a registered society and a community interest company
• amalgamation is “Amalgamation of CIOs”
• transfer is “Transfer of CIO’s undertaking to another CIO“

The only conversion regulations, in 2017, define a CIC conversion as an application by a CIC to be converted into a CIO. Scotland’s Chapter 7 mirrors it exactly. OSCR says in terms that a SCIO cannot choose to convert to another legal form. You cannot cite a negative like this to one section, so the list of provisions is the evidence.

This does not mean a CIO is trapped. The law expressly allows it to be dissolved. The practical route out is not banned: form a new company, transfer the undertaking under the CIO’s general powers, then dissolve the CIO. But it is not a statutory conversion. So you must deal with permanent endowment, TUPE, novation and legacy risk by hand.

2. Incorporating the trustee body does not limit liability.

Unincorporated charities are often told that incorporating their trustee body under Part 12 of the Charities Act 2011 solves their liability problem. It does not. The section says so in its own heading: “254 Liability of charity trustees not affected by incorporation”.

The text of s.254 puts it beyond doubt. After a certificate of incorporation is granted, all charity trustees remain “chargeable for such property as comes into their hands” and “answerable and accountable for their own acts, receipts, neglects, and defaults, and for the due administration of the charity and its property, in the same manner and to the same extent as if no such incorporation had been effected“.

What Part 12 incorporation does do is give the trustee body corporate status for holding property. Then title need not be transferred each time the trustees change. It makes it easier to hold property. It is not a shield against liability.

The structures side by side

The table compares the four main forms for a new charity in England and Wales, row by row.

	CIO	Charitable company (CLG)	Charitable trust	Unincorporated association
Separate legal personality	Yes — s.205(1), “A CIO is a body corporate”	Yes, from incorporation	No	No
Who bears the liability	The body	The body	The trustees personally. They sign contracts in their own names. Their indemnity comes out of the charity’s funds only, which is worthless when the fund is empty. Neither form can hold property, employ staff or contract in its own name — see
Registration duty	Whatever the income	Above £5,000 of gross income
Regulators	Charity regulator only	Charity regulator and Companies House	Charity regulator only
Annual statutory filings	The charity annual return package alone	3 separate filings: Companies House accounts, the Companies House confirmation statement, and the charity annual return package	The charity annual return package alone
Set-up cost	£0	Companies House incorporation fee — £100 online, £124 on paper — plus a confirmation statement fee every year thereafter, £50 online	Nil to the regulator
Statutory minimum trustees	1 on the face of the Act — but read the warning below	1 director, Companies Act 2006 s.154	No general statutory minimum. Some rules apply where capital money arises and when a trustee is discharged or retires
Minimum trustee age	16 years	16 years	18 years
Route out	No statutory conversion out; transfer and dissolve	Statutory conversion into a CIO available; the same legal person continues	No conversion — a new entity, a transfer, and closure

Two cautions on the minimum-trustee row, because the numbers mislead. The Charities Act sets a floor of one for a CIO. But the constitution must also comply with the CIO regulations.

It must be in the Commission’s model form, or as near to it as the case allows. Neither the regulations nor the model constitutions were read here. Do not publish or rely on “a CIO can have one trustee” without checking both.

For a charitable company the statutory minimum is one director. The Commission’s model articles leave the number blank and recommend three. For a trust the model recommends three as well. Those recommendations are not law.

One separate correction. The Trustee Act 1925 caps trustees of land at four. But s.34(3) expressly disapplies that cap to land held for charitable, ecclesiastical or public purposes. So it does not cap a charity’s board.

The CIO trade-off, and the banking loop it creates

A charitable incorporated organisation (CIO) is a charity that is a body corporate in its own right. The form is available only in England and Wales. The CIO is usually the right answer for a new incorporated charity there. It has one special cost and one real complication.

The cost is that the income threshold does not apply. A CIO must register whatever its income, and must file its annual return package whatever its income. Say a body would have had no duty to register as an unincorporated association. By choosing this form, it takes on that duty for good.

Do you have to register your charity? sets out the duty for every form.

The complication is that a CIO does not exist until it is registered. s.210(1) is explicit. On registration it becomes, “by virtue of the registration”, a body corporate whose first members are the applicants. Registration does not recognise a CIO. It creates one.

That is the opposite of every other structure. An unincorporated association or trust exists before it registers. A charitable company exists from incorporation. The application asks for the charity’s bank details. But a body that does not exist cannot hold an account in its own name. So the chicken-and-egg problem is real, and only CIOs face it.

The Act anticipated it, and almost nobody explains the answer. s.210(2), verbatim: “All property for the time being vested in the applicants (or, if more than one, any of them) on trust for the charitable purposes of the CIO (when incorporated) by virtue of this subsection becomes vested in the CIO upon its registration.”

So the applicants hold the account on trust for the planned CIO. It vests in the CIO on registration, with no transfer, no assignment and no further step.

What is not established is whether a given bank will open an account on that basis. The legal route exists in statute. How banks act is not established. This page will not pretend that the loop has no answer. Nor will it pretend the answer is simple.

Open a bank account covers the practical side. What you can do while your application is pending covers the wait itself.

Two consequences that arrive later than the decision

Trustee age flips on the structure you pick. “How old must a trustee be” has no single answer, and the answer is not in the Charities Act at all.

In England and Wales the minimum age is:

• 16 years for a charitable company (Companies Act 2006 s.157)
• 16 years for a CIO (reg 31 of the 2012 CIO Regulations)
• 18 years for a trust or unincorporated association (Law of Property Act 1925 s.20)

Three laws set it, so the answer flips with the form. A youth charity that wants sixteen- and seventeen-year-old trustees must choose a CIO or a company. An unincorporated association rules that out, and an appointment made in breach is void. The wider rules are in who can be a charity trustee.

A company does not choose its financial year. The date of incorporation sets a charitable company’s first accounting reference date. It is the last day of the month in which the anniversary of incorporation falls. The founders never pick it.

You can change it later by notice to the registrar, but that is a filing nobody planned. Every other structure sets its year end in the governing document or by resolution. It costs nothing to decide the year end before you incorporate, and to time the incorporation to match. Set your financial year end covers that choice.

Changing your mind later

Some routes are statutory conversions and some are not, and the difference is huge. Charitable company to CIO is a statutory conversion. The same legal person continues, with the same name, charity number and bank accounts. s.233(4) makes clear that existing liabilities continue with it. Nothing transfers because nothing needs to.

Convert a charitable company to a CIO sets out the process.

Unincorporated charity to CIO is not a conversion at all, though almost everyone calls it one. It means you:

• set up and register a new CIO
• transfer the assets
• deal with permanent endowment and designated land separately
• close the old charity

You need new bank accounts, because accounts cannot be transferred between charities. TUPE may apply to staff. The biggest risk is legacies. The CIO is a new charity, so a will that benefits the old one does not carry over by itself.

That is why the change should be registered on the register of mergers. The detail is in move an unincorporated charity to a CIO.

One correction in passing, because out-of-date content is still around. The old statutory transfer power for unincorporated charities had an income limit. It was repealed on 7 March 2024 and replaced by s.280A, which has no income threshold. Anything still quoting the old limit is more than two years out of date.

Scotland and Northern Ireland

Scotland. The SCIO is the Scottish version of the CIO, not the same thing. Far too many sources report it as identical. Two differences are established.

A SCIO’s constitution must provide for the appointment of 3 or more charity trustees, under s.50(2)(b). This appears to be the only true statutory minimum number of trustees anywhere in UK charity law. Every other “three” in UK charity guidance is a model-document default or a recommendation.

SCIO members also have no liability at all under s.49(4). A CIO’s constitution, by contrast, may impose a capped liability on its members under s.205(3)(b).

For the CIO it is a choice in the constitution. For the SCIO the statute rules it out. A CIO cannot be formed in Scotland; its principal office must be in England or Wales.

Scotland also has no minimum trustee age in statute outside company law. OSCR expects trustees to be over sixteen and suggests professional advice below that. But that is what the regulator expects, not a rule — see 16 years. A site that prints “sixteen across the UK” is wrong twice over.

Northern Ireland has no CIO. Part 11 of the Charities Act (Northern Ireland) 2008 provides for one. But all eighteen sections are still marked prospective and never came into force.

The form exists in law but has never existed in fact. Content that lists it as a Northern Irish option is wrong.

The forms on offer are the charitable company, the trust and the unincorporated association. CCNI gives the minimum trustee ages as 18 for an unincorporated charity and 16 for a company director. It cites no provision for the first.

What to do about it

Work the table in this order:

1. If you will employ, sign contracts or hold property, choose an incorporated form.
2. If registering is a burden you would otherwise avoid, count the CIO’s automatic duty to register as a real cost.
3. If you need trustees under eighteen, the unincorporated forms are ruled out.
4. If you are in Scotland or Northern Ireland, the choice of forms is different.

Next: choose your legal structure. That step ends in a minuted trustee decision recording the structure and the reasons. You will want that record if anyone ever questions the decision. If you choose a charitable company, you then incorporate at Companies House once the articles are adopted.