Charity vs CIC vs CIO

Since the form became widely available in 2016, CIO has been the dominant choice for new UK charity registrations. The practical reasons:

• One regulator, not two. No Companies House filings, no confirmation statement, no dual annual accounts format
• £0 to set up, £0 in annual filing fees
• ECCTA identity verification doesn't apply to CIO trustees — material saving for boards with several trustees and turnover. From 18 November 2025, charitable company directors must verify; CIO trustees do not
• Same charity tax reliefs as a charitable company — gift aid, 80% rates relief, SDLT relief, primary-purpose trading exemption
• Limited liability for trustees — same protection as a charitable company

The flip side: charitable companies are still more familiar to lenders, landlords and large funders, and many long-established charities don't see enough upside in conversion to justify the work. New charities, though, almost always pick CIO.

CIC is the right call when:

• Your purposes aren't exclusively charitable in the meaning of the Charities Act 2011 s.3. Community broadband, community pub, certain local journalism, some advocacy work — all fall outside the strict charitable definition
• You want to trade commercially as the main activity — café, shop, design studio, training provider — and would breach the charity small-trading exemption (25% of income or £80,000, lower)
• You want to pay directors a market salary without Charity Commission authorisation
• You want to raise share capital from mission-aligned investors (CIC limited by shares, with 35% dividend cap)
• You want lighter governance flexibility — no regulated-alterations regime, no public-benefit test

Trade-offs: full corporation tax (no charity exemption); no gift aid; no mandatory rates relief; narrower grant funder eligibility; ECCTA identity verification applies.

Despite the CIO advantages, charitable companies remain preferable in some cases:

• You're a long-established charity with stable systems, an experienced board, banking and landlord relationships built around the Companies Act framework. The conversion gain may not justify the administrative work
• You operate a significant trading subsidiary that is itself a charitable company — keeping the parent in the same legal form simplifies group accounting
• You face institutional counterparties (lenders, large funders, corporate partners) who are more comfortable with Companies House registration than with the relatively newer CIO form
• You're subject to specific regulatory requirements that map more cleanly onto the Companies Act framework

For most new charities, none of these apply — and CIO is the cleaner choice.

• Charitable company → CIO: direct statutory conversion under Charities Act 2011 ss.228–233 (in force since 1 January 2018). Special resolution + Charity Commission registration + Companies House cancellation. Legal personality preserved
• CIC → CIO:direct statutory conversion under the CIO (Conversion) Regulations 2017 (in force since 1 January 2018), but only if all the CIC's purposes are charitable and the CIC Regulator decides the CIC can cease to be a CIC. See converting a CIC to a CIO
• CIO → CIC: not permitted by statute
• CIC → charitable company: possible but uncommon — the CIC changes its articles to become a charity under ss.53–55A of the Companies (Audit, Investigations and Community Enterprise) Act 2004, with the CIC Regulator deciding whether it can cease to be a CIC

• CIC vs charity: which structure actually fits? →

  The two-way version of this comparison, in more depth.

• CIO explained →

  Foundation vs Association, the November 2023 model, registration walk-through.

• CIC explained →

  CIC36, asset lock, dividend cap, CIC34 annual report.

• UK community group legal structures compared →

  The full seven-structure comparison on one page.

• Converting a CIC to a CIO →

  The statutory conversion process introduced in 2018.

• Charitable trust explained →

  The unincorporated trust form — common for legacy and endowed charities.

• Charities Act 2011 ss.3 (charitable purposes), Part 11 (CIOs), ss.228–234 (conversion)
• Companies (Audit, Investigations and Community Enterprise) Act 2004; Community Interest Company Regulations 2005 (as amended 2014)
• Charitable Incorporated Organisations (Conversion) Regulations 2017 (in force 1 January 2018)
• Charities Act 2022 — substantially in force; Phase 4 (s.331A) commenced 27 November 2025
• Economic Crime and Corporate Transparency Act 2023 — identity verification mandatory from 18 November 2025 (existing directors with the next confirmation statement)
• Companies House fee schedule (fees from 1 February 2026)
• Office of the Regulator of Community Interest Companies guidance and CIC36 framework