Guidance note: Charitable Incorporated Organisation (CIO) status as it relates to the registration of service providers

Transcription

1 Guidance note: Charitable Incorporated Organisation (CIO) status as it relates to the registration of service providers Mae'r fflurflen hwn hefyd ar gael yn Gymraeg/This document is also available in Welsh [PG18/740e] Guidance note on CIO status 06/2018 1

2 Contents Summary... 3 Background... 3 Registration as an individual or as an organised body... 3 Implications for registration... 4 Registration scenario #1 an individual registered person... 4 Registration scenario #2 a limited company or charitable company which gains status as a CIO... 5 Registration scenario #3 unincorporated association which gains status as a CIO... 6 What we do with the information we receive from you [PG18/740e] Guidance note on CIO status 06/2018 2

3 Summary This guidance note has been developed to provide inspectors, registered providers and umbrella organisations with advice on Charitable Incorporated Organisation (CIO) status as it relates to the registration of service providers. The information in this guidance note has been confirmed as legally correct by Welsh Government Legal Services. Background A Charitable Incorporated Organisation is a new form of legal entity designed for non-profit organisations in the United Kingdom. CIOs have a legal personality which means they have the ability to conduct business in their own name, and limited liability so that their members and trustees do not have to contribute in the event of financial loss. CIO status is not restricted to any particular sector and CIW may have to deal with cases where adult or children s services providers are seeking or have achieved CIO status. CIW will need to consider whether the existing registration remains correct or whether the identity of the registered entity is changed by gaining CIO status. CIW is aware that umbrella groups representing a range of child care and play service providers are supporting child care and play services to seek registration with the Charities Commission as a CIO. CIW inspectors need to be aware of the implications of such a change. This guidance seeks to provide some indicators to assist inspectors and registered persons in knowing whether the correct legal entity is registered. CIW needs to ensure that: We correctly identify services where a CIO is in place; We correctly identify whether this has any implications for the existing registered provider s registration; We take appropriate action to ensure the correct legal entity is registered, and The advice we provide about the registration implications of an individual or organisation gaining CIO status is consistent across Wales. Registration as an individual or as an organised body In deciding whether an application to register as an individual or organisation is needed, CIW will consider who makes key decision regarding the operation of the service: Who is able to enter directly into employment contracts with staff; an individual person or a committee/board of Trustees? [PG18/740e] Guidance note on CIO status 06/2018 3

4 Who has control over the premises in which the service is conducted (whether as tenant or owner) an individual or committee? Does the individual themselves have a contract of employment with a committee/board of trustees? Who is able to take disciplinary action regarding the individual registered person, including decision to suspend or dismiss from employment? In whose name are the employee and public liability insurances? Who is accountable for any liabilities which may arise? If the answer to any of these points is the committee/board of trustees then CIW may consider that the service is being carried on by the committee or board of trustees and not an individual. An application to register as an organisation would therefore be required, and if they have CIO status then the application should be as a CIO. This list is not exhaustive; there may be other considerations that assist CIW to reach a conclusion Implications for registration If a service is a not-for-profit organisation and plans to or has gained status as a CIO, contact with CIW is advised if: The current registered person is an individual The current registered person is a limited company The current registered company is a charitable company The current registered provider is an unincorporated association. Registration scenario #1 an individual registered person This would be where the certificate of registration named a specific person as the registered person. This may include several individuals each named as the registered person for the same service. Alongside the individuals, there is an organised body a committee or board of trustees that govern the operation of the service. The organised body (committee or board of trustees) gain status as a CIO. This means they would have an identity as an organisation through registration as a CIO by the Charities Commission. An application to register the CIO as provider of the service will be required if: The service is carried on (see checklist above) by an organised body. [PG18/740e] Guidance note on CIO status 06/2018 4

5 The organised body gains status as a CIO. An application to register the CIO as provider of the service will not be required if: The existing registered person is an individual and holds decision making responsibility for the factors identified above. CIW will provide advice about registration requirements to any individual where it appears to us that the individual does not hold decision making responsibility relevant to the carrying on of the service. CIW is aware that there are a number of child care and play services (e.g. cylchoedd meithrin) or adult services where the registered person/provider is an individual even though there may be an organised body governing the service. In child care and play services this registration may have pre-dated the legislative changes that allowed unincorporated associations to register; in adult services this may relate to services which are carried on by a board of trustees (for example) and where the legislation does not allow application to register as provider by an unincorporated organisation. Where the existing registered person does not hold decision making responsibility then an application to register as an organisation will be required. An application to register as an organisation must be made to CIW within 28 days of registration as a CIO, and a Responsible Individual must be nominated as part of this application. Registration scenario #2 a limited company or charitable company which gains status as a CIO This would be where the registration certificate names a limited company or a charitable limited company as the registered provider. When changing from a limited company or a charitable company to a CIO, the newly created CIO will have its own separate legal identity. An application to register the CIO as provider of the service will therefore be required as: In the case of a charitable limited company, the pre-existing charitable company will be dissolved once all its assets have been transferred to the CIO, and removed from the register. The legal entity registered as provider will therefore no longer exist. In the case of a limited company, the existing registration of the limited company will be changed by the change in status of the organisation into a CIO. [PG18/740e] Guidance note on CIO status 06/2018 5

6 Registration scenario #3 unincorporated association which gains status as a CIO This would be where the registration certificate names the committee or board of trustees as the registered person. An application to register the CIO as provider of the service will be required if: A previously unincorporated association changes its status with the Charities Commission to a CIO, therefore a new legal entity with responsibility for carrying on the service is created. The unincorporated association (which was registered with CIW) would no longer exist and so a new registration with CIW in the name of the CIO would be required. What we do with the information we receive from you. We process any personal and/or sensitive information we hold about you fairly and lawfully, and we only ask for such information where it is necessary for us to carry out our role. For more information about how we process your personal data, and your rights in relation to this, please see our Privacy Notice at or contact us for a paper copy. [PG18/740e] Guidance note on CIO status 06/2018 6