New legal forms for charities in the United Kingdom

The Charities and Trustee Investment (Scotland) Act 2005 (the 2005 Act) and the Charities Act 2006 (the 2006 Act) introduced wide-ranging changes to the regulation of charities in Scotland, England and Wales. The most prominent changes related to the introduction of a new public benefit test1 for charities and a revision of the lists of charitable purposes2 open to charities. Rather less public attention has been afforded to the creation of two new dedicated incorporated legal forms for charities: the Scottish Charitable Incorporated Organisation (SCIO) for charities registered in Scotland and the Charitable Incorporated Organisation (CIO) for charities registered in England and Wales. The legal regimes resulting from the creation of the bodies combine regulation of form and status in a unique manner. This article considers the history and background to the development and introduction of the new bodies and reviews the major characteristics of the SCIO and CIO as outlined in the 2005 and 2006 Acts. The relationship between the regimes established in respect of the new forms and existing company law is considered and an assessment made as to how successfully the initial policy objectives for the new bodies have been achieved by the creation of the SCIO and CIO and how well the new regimes provide for the effective operation of the new bodies.