CIO, charitable company, trust or association – and how to decide between them
Your charity’s structure is its legal form – the thing your governing document creates – and it decides three practical things: whether your charity can hold property and sign contracts in its own name, whether your trustees are personally liable for what it does, and who regulates it. There are four structures in England and Wales: a charitable incorporated organisation (CIO), a charitable company, a charitable trust, and an unincorporated association. Most new charities choose a CIO, but the right one depends on how you plan to operate.
This guide sets out how to decide – the two questions that settle most of it, what each structure commits you to, and a side-by-side comparison. For the wider registration picture, our full registration guide sets out the whole process.
What is a charity’s structure, and why does it matter?
Your structure is defined by your governing document, the legal document that creates the charity and says how it is run. It shapes who runs the charity and whether it has a wider membership, whether it can employ staff or enter contracts in its own name, and whether the trustees carry personal liability for what it does. It also fixes who regulates you. And it is awkward, sometimes costly, to change once you are registered – so it is worth deciding deliberately at the start rather than defaulting to whatever seems easiest.
What two questions decide which structure you need?
The Charity Commission frames the decision on two axes, and answering both points leads you to one of the four structures.
First: do you need to be a corporate body – incorporated? An incorporated charity is a legal entity in its own right, separate from the people who run it. It can employ staff, sign contracts, and own property in its own name, and its trustees are generally not personally liable for its debts, as long as they act properly. An unincorporated charity has no separate legal identity: the trustees hold property and enter contracts personally, and carry the liability themselves. If your charity will employ people, hold premises, deliver contracts, or take on real financial risk, incorporation is usually the safer answer.
Second: do you want a wider voting membership? Some structures have only the trustees as members – the “foundation” model. Others have a wider membership that votes on key decisions, such as appointing trustees or changing the governing document – the “association” model. A wider membership suits charities that want their community or beneficiaries to have a formal say; a trustee-only board suits those that want decisions kept with the trustees.
What is a CIO, and who is it for?
A CIO is incorporated and answers only to the Charity Commission – no Companies House filing, and lighter ongoing administration than a company. It was created for charities, which is why most new ones choose it. Because a CIO is created by registration, it registers whatever its income, and it sends accounts and an annual return to the Commission every year. It comes in two forms: a foundation CIO, where the trustees are the only members, and an association CIO, which has a wider voting membership. Our guide to registering a CIO covers the structure, the two types, and the application in full.
What is a charitable company, and who is it for?
A charitable company gives the same incorporation and limited liability as a CIO, but it registers with both Companies House and the Charity Commission and follows company law alongside charity law. It is limited by guarantee rather than shares, cannot distribute profits, and applies its assets only to its charitable purposes. The trade-off is more administration – two regulators, two sets of filings – in exchange for a long-established framework that funders, lenders and lawyers know well. It tends to suit larger charities, those with complex operations, or charities planning a trading subsidiary.
What is a charitable trust, and who is it for?
A trust is unincorporated and governed by a trust deed. It has no separate legal identity and no wider membership – the trustees run it and hold any property on its behalf, which means they carry personal liability. A trust suits a charity that won’t employ many staff or run a business, and is a natural fit for grant-making or for holding and managing assets. One practical point: a trust deed has to specify a starting sum of money, land or other assets, or the Commission will not register it.
What about an unincorporated association?
An unincorporated association is the membership version of an unincorporated charity: it has a wider voting membership but no corporate structure, so its trustees remain personally liable. It is governed by a constitution and suits small, low-risk community groups – a local club or society with no staff, no premises and few assets. For anything that will grow, employ people or take on risk, an incorporated structure protects the people running it far better.
Which structure should you choose?
Put the two questions together, and the pattern is clear. Most new charities that will do real work – employ anyone, hold a lease, deliver services – want incorporation, and for them, a CIO is usually the simplest route, since it gives the protection without the dual regulation of a company. Choose a charitable company instead when you specifically want the company-law framework: a trading subsidiary, complex financing, or funders who expect it. Choose a trust when the charity exists mainly to hold assets or make grants and won’t employ staff. An unincorporated association only really makes sense for a genuinely small, low-risk membership group.
In short, a CIO and a charitable company are both incorporated, so trustees have limited liability – the difference is that a CIO answers only to the Charity Commission, while a company answers to Companies House as well. A trust and an unincorporated association are both unincorporated, so trustees are personally liable – the trust is run by its trustees and suits grant-making or holding assets, while the association has a wider voting membership and suits small community groups. For most new charities doing active work, that points to a CIO.
Getting the structure right at the outset saves a costly change later. If you’re weighing it up against what your charity will actually do, book a free call, and we’ll help you choose.
Can you change structure after registration?
Yes – a charity can change its structure if the trustees decide another would suit it better, and plenty do, often moving from an unincorporated form to a CIO as they grow. It is not a quick switch, though: it can mean setting up a new charity and transferring everything across, so it is better to choose well at the start than to rely on changing later. The Commission’s guidance on changing your charity’s structure covers the process.
Choosing the structure that fits
The structure decision forms everything that follows – your governing document, your liability, your reporting – and it is one of the few choices that is genuinely hard to unpick once you are registered. If you’d like to settle it against how you actually plan to operate, our charity setup and registration support talks it through and prepares the application around the structure you choose.
