Converting a CIC to a CIO

CIC → CIO conversions have been available since the Charitable Incorporated Organisations (Conversion) Regulations 2017 came into force on 1 January 2018 (the Charity Commission published its CIC conversion guidance on 31 August 2018). Three current reasons to consider it:

• The ECCTA identity-verification regime. From 18 November 2025, all directors and people with significant control of UK companies (including CICs) must verify identity via GOV.UK One Login or an Authorised Corporate Service Provider. CIO trustees are not on the company register and do not need to verify. For CICs with several directors and frequent board turnover, the ongoing admin saving is real.
• The 1 February 2026 Companies House fee rise. The online confirmation statement fee rose from £34 to £50, on top of the £15 fee for filing the CIC34 report each year. A CIO pays neither.
• Grant-funding ceiling. Many trusts and foundations remain charity-only. A small CIC growing into grant-dependent territory finds the structure limits its eligible funding pool.

A CIC may convert to a CIO only if all its objects are exclusively charitable in the meaning of the Charities Act 2011 (s.3 — recognised purposes; s.4 — public benefit). The Charity Commission tests this as part of the conversion application; if it fails, the conversion does not proceed.

Many CICs cannot satisfy this test. Common reasons:

• The CIC36 community-interest statement names benefits that are broader than “charitable” (e.g. general support for local SMEs, support for “local people” without reference to need).
• The activities deliver substantial private benefit (to individuals beyond a class of beneficiaries, or to directors and connected parties beyond reasonable remuneration).
• The purposes are partly political (campaigning purposes can fail; campaigning activities in furtherance of a charitable purpose are allowed).
• The CIC trades commercially in a way that isn't in direct pursuit of charitable purposes and that wouldn't fit within the charity small-trading exemption.

If you fall outside the test, the alternative is to form a new CIO and gift the relevant assets across (the CIC continuing to run any non-charitable activities, or winding up).

1. Confirm shares are fully paid up (CIC limited by shares only). Any unpaid share capital must be paid or cancelled before conversion. On conversion, all shares are cancelled.
2. Draft a CIO constitutionusing the November 2023 Charity Commission model (Foundation or Association version), with purposes mirroring or refining the existing CIC purposes to fit the charitable test. If each member's guarantee is more than £10, the CIO constitution must keep a member liability of at least the same amount.
3. Pass a special resolutionof the CIC's members approving: (a) the conversion; (b) the adoption of the CIO constitution; (c) the change of name if applicable. 75% of votes cast required. A unanimous written resolution of the members is the alternative.
4. Apply to the Charity Commissionthrough its online charity registration service. In the “Special circumstances” section, say that you are a CIC applying for charitable status as a CIO and give the CIC's name. Attach: the conversion resolution, the proposed CIO constitution, the resolution adopting it, and a Trustee Declaration form for each trustee.
5. Charity Commission and CIC Regulator review. The Commission tests whether the CIO would be a charity. It notifies the CIC Regulator, who decides whether the CIC is eligible to cease being a CIC. The Commission may refuse if the CIC has overdue accounts or other filings at Companies House.
6. Companies House cancels the CIC and the Commission registers the CIO. The same entity now exists as a CIO with the same legal personality, the same contracts, the same property, the same staff. A new charity number is issued; the old company number is closed.

Total elapsed time: typically 3–6 months. The Charity Commission review is the variable component: the Commission gives no guaranteed timescale, and complex cases (substantial assets, related-party transactions, novel purposes) take longer.

Preserved:

• Legal personality — the same organisation continues
• Contracts and leases (no need to novate)
• Employment relationships
• Intellectual property registrations
• Title to property
• Trading history and reputation

Not preserved:

• The Companies House registration (cancelled)
• Share capital (cancelled on conversion)
• The CIC34 reporting obligation (replaced by Charity Commission annual return regime)
• The ability to pay dividends (CIOs cannot)
• The previous trading-without-restriction freedom (the charity-trading rules now apply)
• In some banks' eyes — the existing bank account (see above)

Where the CIC cannot satisfy the “exclusively charitable” test, the route is:

1. Form a new CIO with charitable purposes that cover the charitable elements of what the CIC currently does.
2. The CIC gifts the relevant assetsto the new CIO under a deed of gift (cash, equipment, IP, customer relationships for charitable activities). The asset transfer must comply with the CIC's asset lock: a gift to the CIO is allowed if the CIO is named in the CIC's articles as a specified asset-locked body, or with the CIC Regulator's consent.
3. The CIC continues to run any non-charitable activities (if there are any worth keeping) or is wound up via voluntary dissolution under the Companies Act, with any remaining surplus passing to another asset-locked body.
4. A CIC is not a charity, so this transfer is not a “relevant charity merger” under Charities Act 2011 s.306 and cannot be entered on the Charity Commission's Register of Mergers. Gifts in wills that name the old CIC will not pass to the CIO under the merger rules.

This is slower and more expensive than statutory conversion, but it remains the only route for CICs whose purposes don't qualify.

Direct conversion (CIC → CIO under the 2017 Regulations):

• Filing fees: £0 to the Charity Commission; the CIC pays its final CIC34 fee (£15) and final confirmation statement (£50 online) before conversion completes.
• Professional advice: typically £750–£3,000 for a charity-sector solicitor or specialist to draft the resolution, review the constitution and prepare the application. DIY is feasible but raises the rejection risk on the charitable-purposes test.
• Time: 3–6 months end to end.

Indirect route (new CIO + asset transfer):

• Filing fees: still £0 for CIO registration; the CIC continues to pay its annual fees until wound up.
• Professional advice: typically £1,500–£5,000 — the deed of gift, the new CIO setup, the asset-transfer mechanics and the CIC wind-up all add work.
• Time: 4–8 months end to end.

• Community Interest Company (CIC) explained →

  What the CIC form is, what the CIC36 and CIC34 actually require, the dividend cap, and the asset lock.

• Charitable Incorporated Organisation (CIO) explained →

  The destination structure — Foundation vs Association, the November 2023 model constitution, banking realities.

• CIC vs charity: which structure actually fits? →

  The strategic comparison underlying the conversion decision — tax, funding, governance, trading freedom.

• UK community group legal structures compared →

  The full seven-structure landscape, including the conversion paths matrix.

• Charitable Incorporated Organisations (Conversion) Regulations 2017 (SI 2017/1232) — in force 1 January 2018; Part 2 covers CIC conversion
• Charities Act 2011 — s.3 (charitable purposes), s.4 (public benefit), s.234 (conversion of CIC), ss.305–306 (register of mergers); Part 11 (CIOs)
• Companies (Audit, Investigations and Community Enterprise) Act 2004 and Community Interest Company Regulations 2005 (as amended 2014)
• Economic Crime and Corporate Transparency Act 2023 — identity verification (mandatory 18 November 2025); ACSP regime
• Charity Commission guidance: Convert a Community Interest Company to a CIO (published 31 August 2018)
• Office of the Regulator of CICs: CIC business activities: forms and step-by-step guidelines, section 14 (convert a CIC to a CIO)
• Companies House fee schedule (fees from 1 February 2026)

General information, not legal advice. Conversion of a trading organisation has tax, contractual and employment implications; take advice from a charity-sector solicitor before initiating.