Over the past couple of months, we have been looking at our structure. Currently we are a constituted community group, which serves us well but has a few short comings. For example, since our organisation is not a separate legal entity in the eyes of the law, the committee takes personal liability for any risk or debts.
The legal structure (click link to see options) can have a huge impact on any future activities, such as fundraising, trading or contracting because the legal status is closely linked with how you we governed and regulated. It can also affect our legal rights as an organisation.
We have looked at the many different legal entities that we can adopt, the one your committee has settled on is a Charitable Incorporated Organisation by Association (CIO) because it doesn’t change the ethos of the group and it is less rigid in how it is maintained than a conventional charity.
What is a Charitable Incorporated Organisation?
- A CIO is a legal structure regulated by the Charity Commission that was introduced to help simplify the process for setting up a charity.
- A CIO is governed by Charity Law (not Company Law) and the liability of trustees is limited (rather like being a director of a limited company)
There are two forms of CIO:
- Association model – this has a wider membership, including voting members other than charity trustees. We have a registered membership and we want to keep this.
- Foundation model – the only members are the trustees and there is no wider membership. Glamis Hall is a Foundation CIO.
Why do this when what we are is working?
- Having a charitable status makes it easier for companies to support us. Some simply will not support us as we are.
- Becoming a legal entity, means that we can limit the liability of our committee and members.
- There is no minimum level of income required to register as a CIO so we can immediately apply to be registered at the Charity Commission.
- As we grow, we will exceed the financial limit for our current status, so we need to change to a legal entity.
- Most other legal structures, including Community Interest Companies (CIC) Co-operatives and Limited Companies by Guarantee are better suited to not-for-profit businesses that generate income through sales.
- We want to remain a community group with a membership, that delivers services with the support of partners, to benefit local people and our environment.
- Wellingborough Eco Group is a membership organisation, that has a committee that represents the members. We wanted to keep this structure where every member’s voice counts.
- Becoming a CIO will mean that we will also have trustees who are legally responsible for the organisation, but as an associated CIO our members will continue to drive and add to what we do.
What difference will it make to me?
- For most people, absolutely nothing in the short term; but in the long term we will be able to improve and increase our services.
Have your say!
- Please do let us know what you think to us becoming an Associated CIO. You views are important, this is your group.
- We will formally move forward with this proposal at our next Committee Meeting at 7pm on Tuesday 15th at ECO HUB.
Registered members are most welcome to attend. Join for free at https://wellingboroughecogroup.org.uk/eco/join-us/ (if you haven’t already) to receive newsletters and to vote.
Becoming a CIO is all about what is best for the long term and about making our group sustainable, so that we can continue to make our community more sustainable for everyone.
Thank you for your support.
