Since April 2011, existing unincorporated charities have been able to apply to change their legal form to the new legal entity of a Scottish Charitable Incorporated Organisation (SCIO). What are the advantages of becoming a SCIO?
Some of the advantages of becoming a SCIO are:
- Liability of charity trustees is limited and members are not liable to contribute to the assets if it is wound up.
- It has a legal personality and can undertake transactions in its own right.
- Single regulator - OSCR.
- Title to land and buildings will be held in the name of the SCIO.
- Freedom to take all steps and actions in pursuit of its charitable objects (subject to any specific restriction in the constitution).
- Creditors have certain protection when conducting business with SCIOs and when SCIOs are winding up.
There are some potential disadvantages:-
- SCIOs must have a head office in Scotland and must be a Scottish charity.
- Once you are a SCIO you cannot convert to an alternative legal form or combine with a non-SCIO charity. The only option for moving away from SCIO legal form would be to dissolve the SCIO, transferring its funds, assets and activities to another charity with similar purposes that had an alterative legal form.
- A SCIO can only exist as long as it is a charity entered in the Scottish Charity Register. Unlike other charities, SCIOs cannot carry on operating if they cease to be charities.
- Membership cannot be transferred.
- Resolutions of members are required before certain actions can be taken.
- A duty to keep registers of members and charity trustees, and to make these publicly available in certain circumstances.
- A meeting of members must be held at least every 15 months.
From January 2012, charitable companies and industrial and provident societies will be able to convert to SCIOs.
Please contact our charities team if you would like any additional information or wish to discuss your charities specification requirements in more detail.
