Converting a CIC to a CIO

CIC → CIO conversions have been available since the Charitable Incorporated Organisations (Conversion) Regulations 2017 came into force in September 2018. Volumes were modest in the first few years. They've risen since 2024, driven by three things:

• 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. Incorporation fees double (£50 → £100) and the confirmation statement rises from £34 to £50. CIOs pay neither. Small CICs are looking at the lifetime fee saving and deciding the conversion is worth it.
• 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 constitution using the November 2023 Charity Commission model (Foundation or Association version), with purposes mirroring or refining the existing CIC purposes to fit the charitable test.
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.
4. Apply to the Charity Commissionusing the dedicated CIC-to-CIO route within the online registration service. Attach: the special resolution, the proposed CIO constitution, the existing CIC's articles, the most recent accounts, and a trustees' declaration.
5. Charity Commission review. The Commission tests the charitable status of the purposes and, if satisfied, registers the new CIO and notifies Companies House.
6. Companies House cancels the CIC. 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; simple cases process in 6–8 weeks, complex ones (substantial assets, related-party transactions, novel purposes) 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 — gifts to a charity are permitted.
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. Register the merger on the Charity Commission's Register of Mergers under Charities Act 2011 s.305 — preserves entitlement to future legacies left to the old CIC.

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 (£34 / £50) 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 — in force 1 September 2018
• Charities Act 2011 — s.3 (charitable purposes), s.4 (public benefit), s.305 (register of mergers); Part 11A (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 on CIO registration and on the CIC-to-CIO conversion route (within the online registration service)
• Office of the Regulator of CICs: Information and Guidance Notes, chapter on conversion
• Companies House fee schedule (current and 1 February 2026 revisions)

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.