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A guide on how to convert a CIC to a charity CIO, and other types of company. You can convert private companies, CICs and charitable companies, but not charitable trusts or unincorporated associations. There are 2 types of company - limited by shares and limited by guarantee.
If you’re not sure whether you should convert your CIC to a charity CIO, or not, this Charity Excellence guide gives you what you need to know and ask yourself. It's just one of the guides in the Non Profit Start Up Toolbox.
Better still, Charity Excellence also works for CICs. If funding is the issue, use Funding Finder, to find a huge range of grants and Help Finder to find companies that make financial donations, plus lots more.
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To convert a company in legal terms is far too complicated for a man of my meagre talents and I'm not clever enough to be a lawyer, so cannot offer professional opinion. If you need expert advice, you should seek it - scroll to the bottom to find that.
My layman's interpretation is that when you convert a CIC to a charity CIO, effectively you change the legal structure of your CIC, but it remains in existence, so no contracts are broken - leases, staff employment and lots of others. That often makes converting much easier than creating a new company and then transferring the assets and closing the existing one. However, if you've set a company up, but aren't trading/have no assets/contracts, then simply closing it and starting again might be simpler.
You can convert a CIC Limited by Guarantee or a CIC Limited by Shares (as long as the share capital is fully paid up) to a CIO.
There are 2 types of CIO - Foundation and Association. Almost everyone chooses the Foundation model.
You can find the detailed guidance on how to convert a CIC to a charity here.
To apply to convert a company to a CIC, you will need to submit 4 documents:
Once completed, you need to post these to Companies House with a cheque for £25.
The Government guidelines and links to the documents above in Section 4 of this publication.
There are a range of other conversions, but (in my experience) these are pretty unusual. For example, you can convert a:
You can find everything you need here.
You cannot convert to a different structure of company. That is, if you are a company limited by guarantee, you must convert to a CIC limited by guarantee. You cannot convert a company limited by shares to one limited by guarantee, or vice-a-versa.
You also cannot covert if your organisations is not incorporated. Usually referred to as unincorporated associations, community groups etc. these have a constitution or governing document but are not registered with the Charity Commission or Companies House. Equally, charitable trusts are registered with the Charity Commission, but are not incorporated.
What you have to do is go through the normal Charity Commission registration process, usually to become a CIO. That can be an absolute pain if you are registered charitable trust, but I've never found a way round it. You can find the Charity Commission guidance here.
A CIC must be a limited company, so an unincorporated charity (including charitable trusts) can’t convert to a CIC.
Basically, you can't convert Community Amateur Sports Club. The CASC scheme allows amateur sports clubs to register with HMRC and benefit from a range of tax reliefs. Once registered as a CASC, a club cannot apply to be recognised as a charity. To convert a registered CASC to a charity involves closing down (winding up) the CASC and transferring over the assets and activities to a new charity.
If your club is already a charity then CASC status is unlikely to be of any additional benefit. You may still apply for CASC status, but if your club meets the requirements of the scheme and is registered as a CASC, then it would no longer be entitled to be a charity.
When applying to convert to or from a CIC, or if you are making changes to your existing CIC, you should submit one of the CIC Regulator's model special resolutions.
For simple explanations of what constitutions and governing documents are, the different types for CICs and charities, which to choose and links to download these, use our Constitutions & Governing Documents guide.
Form CIC 37 is the CIC Regulator's form for applying to convert a company to a CIC.
For more lots more resources to help you make your charity or CIC a success, visit the Start-up Toolbox in the Resource Hub. Better still, join the Charity Excellence Framework, which works for charities and CICs.
the CEF works for any non profit, not just charities.
Plus, 100+downloadable funder lists, 40+ policies, 8 online health checks and the huge resource base.
Quick, simple and very effective.
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This Article Is Not Professional Advice
This article is for general interest only and does not constitute professional legal or financial advice. I'm neither a lawyer, nor an accountant, so not able to provide this, and I cannot write guidance that covers every charity or eventuality. I have included links to relevant regulatory guidance, which you must check to ensure that whatever you create reflects correctly your charity’s needs and your obligations. In using this resource, you accept that I have no responsibility whatsoever from any harm, loss or other detriment that may arise from your use of my work. If you need professional advice, you must seek this from someone else. To do so, register, then login and use the Help Finder directory to find pro bono support. Everything is free.
