Charities’ new legal form takes full effect

Charities’ new legal form takes full effect
Office of the Scottish Charity Regulator (OSCR)
30.12.2011

OSCR predicts continued high demand for SCIO status.

Scotland’s charity regulator expects continued high demand in the New Year for a charitable legal form that takes full effect from 1st January 2012.

The Scottish Charitable Incorporated Organisation (SCIO) is unique to Scottish charities and provides a high degree of protection against personal liability for trustees.  The Office of the Scottish Charity Regulator (OSCR) has been handling applications for SCIO status since April, when the new form became available for those seeking charitable status as well as some types of existing charities.

Read OSCR’s guidance and download an application form here.

From 1st January existing charitable companies and charitable industrial and provident societies will also be able to apply to OSCR to convert to SCIO form.  Currently around 20% of new applications for charitable status seek to become SCIOs, and OSCR’s Head of Charity Services, Martin Tyson, predicts that demand will remain high over the coming year.

‘The SCIO was keenly awaited in the charity sector and so far we have seen substantial interest from new applicants,’ he said.  ‘We believe that interest will be reflected among existing charities that are able to apply to us to convert to SCIOs from 1st January.  The SCIO form does offer a number of benefits, but equally it’s important for those seeking conversion to consider the full requirements and satisfy themselves that the SCIO is appropriate for their organisation’.

The SCIO is a corporate body able to enter into contracts, employ staff, own property, incur debts, and to sue and be sued.  It therefore provides a high degree of protection against personal liability for its charity trustees while not subject to the same reporting and regulatory requirements as a company.  It also provides reassurance for those entering into contracts, and for creditors.

Unlike charities that are companies limited by guarantee, SCIOs report to OSCR as a single regulator.  In addition, a company limited by guarantee must produce fully accrued accounts regardless of its size, whereas a SCIO is subject to the same accounting thresholds as unincorporated charities.

OSCR has produced general guidance, available at www.oscr.org.uk, that explains the SCIO and its key requirements.  The regulator is also meeting with local support groups as part of its Outreach Programme, to outline the practicalities of the SCIO and the points to consider before applying.  The Scottish Government has also published information on the relevant Regulations at:   http://www.scotland.gov.uk/Topics/People/15300/charities