Charitable incorporated organisations (“CIOs”) provide a new legal structure for churches and other charities. Up to now, King’s Church has been operating as a charitable trust, which is an unincorporated structure, but like many other churches it is switching to a CIO. This is because, as an incorporated structure, a CIO is regarded as a legal person in its own right. This gives a CIO two key advantages over unincorporated structures in the areas of liability and property ownership.
With an unincorporated structure, charitable trusts are not regarded as a single legal entity and so they need legal persons to do things on their behalf. These are the charity Trustees, who become personally liable to fulfil the obligations of the charity, which can put the personal assets of the Trustees at risk (we mitigate this by having Trustee indemnity insurance). This stops some people from wanting to serve as Trustees. By contrast, when the church becomes a CIO, the Trustees are no longer personally liable for the charity; it is the CIO alone that is liable and so only the assets of the CIO are at risk.
The second advantage concerns property ownership. As a legal person, a CIO can own property in its own name. A church does not have this ability if it operates through an unincorporated structure, so property has to be held in the names of Trustees on behalf of the church. The church then needs to go through a conveyancing process when the named Trustees leave or die. We have recently had to go through this process for the King’s Church Centre, and this is now in the name of the new CIO.
To complete the transition to a CIO (which is a new legal entity), we are having to switch to a new church bank account, and have opened a new account with the Co-Op Bank. For accounting purposes we have agreed a switchover date to the CIO of 1st September.
Ellen will be sending a letter from Alan McEuen, our Treasurer, to everyone who has given directly to the current Barclays bank account by bank transfer (whether by Standing Order or by single payments). The letter will provide details of the new Co-Op bank account, and we would ask everyone to use this new account from 1st September. For those who give by Standing Order, this will mean cancelling your existing Standing Order paying into the Barclays account, and setting up a new Standing Order for the Co-Op account. Ideally this switchover should be set to occur on 1st September, but we will be operating the two bank accounts in parallel for a period of time, so don’t worry if you miss that date.
As the CIO is a new legal entity, if you are a UK taxpayer and currently Gift Aid, you will need to complete a new Gift Aid declaration. The letter from Alan McEuen will include details of how to do this. There will be a paper copy of the Gift Aid declaration included with the letter. Alternatively, you can go to the Church website and complete an on-line Gift Aid form there. See https://www.kings-soton.org.uk/giftaid for more information.
If you do not currently give to the church by Standing Order, or are a UK taxpayer and currently do not Gift Aid, this is an opportunity for you to think about whether you would like to start doing either of these things.
If you have any questions, please speak with Alan McEuen or one of the Trustees (Richard Douglas, Brian Larder, Paul Dennis, Debbie Warn and Melissa Towers).
Many thanks for your on-going support!
The Leadership Team and Trustees.
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