A charitable company is a company first and a charity second. That sounds like a technicality. It is the reason almost everything about setting one up surprises people – the order you do things in, the two regulators, the two filing deadlines, and the fact that you can be an incorporated charitable company that is not yet a registered charity.
Most new charities do not need one. A CIO gives the same limited liability with a single regulator, which is why it is the usual answer. But some charities genuinely need the company framework, and for those, this is what the process actually involves.
If you have decided on a company and want the articles and the application prepared properly, our charity setup and registration support does exactly that.
When a charitable company is the right structure
The Charity Commission gives three triggers in the guidance that accompanies its model articles. A charity may need to take the form of a company where there is a risk it might incur large financial liabilities – because it is expected to control substantial assets, to employ staff, or to engage in charitable purposes involving commercial risks.
Read carefully; that is an argument for incorporation rather than for a company specifically, and a CIO answers it just as well. So the practical question is narrower: what makes a company the right incorporated form rather than a CIO?
- You plan a trading subsidiary. The parent charity holds shares in a trading company, and the company framework handles that relationship in a way lawyers, accountants and auditors deal with routinely.
- A funder, lender or commissioner expects it. Some capital funders and some public sector contracts are written around company structures.
- Your sector effectively requires it. Some education and housing arrangements are built on company form.
- You already have a company. If the organisation exists as a company limited by guarantee and now wants charitable status, registering the existing company as a charity is usually simpler than starting again.
Absent one of those, the honest answer is that a CIO is simpler and does the same job. Our guide to choosing a charity structure sets out the full comparison, and it is worth settling before you incorporate anything, because changing structure afterwards means creating a new organisation and transferring everything across.
The order you do it in, and why it matters
Three steps, and the sequence is not optional in practice. Prepare the articles of association. Incorporate at Companies House. Then apply to the Charity Commission to register as a charity.
A CIO comes into existence by being registered as a charity; the two events are the same. A charitable company exists from the moment Companies House issues its certificate of incorporation, whether or not the Commission has ever heard of it.
That produces a gap most founders do not expect. Between incorporation and charity registration, you have a real company, with directors and duties, that is not a registered charity. It cannot claim Gift Aid, most funders will not consider it, and it must not describe itself as a registered charity. Depending on the Commission’s current processing times, that gap can run for months.
There is a second consequence worth knowing. A CIO must register with the Commission regardless of its income. A charitable company only has to register above £5,000 a year. So it is possible, and lawful, to run a small charitable company that is not on the register of charities at all. Below that threshold, the Commission will only consider voluntary registration in exceptional circumstances, which you have to specify.
Registering the company at Companies House
A charitable company is almost always a company limited by guarantee. There are no shares and no shareholders. Instead, there are members who guarantee a nominal amount, typically £1, towards the company’s debts if it is wound up. Profits cannot be distributed, and the assets are applied only to the charitable purposes.
Members and directors are different roles, even when they are the same people. Directors run the company and are your charity trustees. Members hold the votes on the things the articles reserve to them, such as amending the articles or removing a director. In a foundation-style charitable company, the trustees are also the only members, which is workable but means keeping track of which hat is being worn at which meeting.
The practical steps at Companies House:
- Prepare the memorandum and articles of association. The Commission publishes model articles for a charitable company. The memorandum is signed by the subscribers, the first members, and cannot be amended once filed. The articles can be changed later, under the procedure they set out.
- Complete form IN01. It names the first directors and the company secretary if you appoint one, gives the registered office, and includes the statement of compliance and the people with significant control information.
- Apply for the exemption from using “limited” in the company name, which many charitable companies take.
- Pay the fee. Incorporation currently costs £100 online or by software, and £124 on paper.
Directors must be at least 16. Some people are disqualified from acting as a company director, and separately from acting as a charity trustee – two different lists, both of which apply, and our guide to who can be a charity trustee covers the charity side.
Directors and people with significant control must also verify their identity with Companies House and hold a personal code. Mandatory identity verification came in on 18 November 2025, so this now applies to anyone incorporating a new company.
When Companies House is satisfied, it issues a certificate of incorporation with your company number. The company exists from the date on that certificate.
What people with significant control means for a charity
This one causes more confusion than anything else on the form, and the common assumption – that a charity has no owners, so it has no PSCs – is only sometimes right.
A PSC is someone who holds more than 25% of the shares or voting rights, can appoint or remove a majority of directors, or otherwise exercises significant influence or control. A company limited by guarantee has no shares, so the share test never applies. The voting rights test does, and it turns on how many members you have.
Three members with equal votes is a third each, which is more than a quarter, so all three are PSCs. Four members is exactly 25% each, which is not more than 25%, so none of them qualifies on that test. Five or more, and you are comfortably clear. Equal voting rights do not remove the requirement; they distribute it evenly, and the arithmetic decides the rest.
Either way, something has to be filed. Companies House is explicit that the PSC field cannot be left blank: if there is no PSC, you must say so and register a statement explaining why. And where someone is a PSC, they must verify their identity and provide their personal code within a 14-day window. The full PSC guidance covers the less common cases.
Registering the company as a charity
With the certificate of incorporation in hand, you apply to the Commission. You now have something a CIO applicant does not – a company number and a company that already legally exists.
The substance of what the Commission assesses is the same whatever your structure: whether your purposes are exclusively charitable, whether each is for public benefit, and whether the trustees understand their role. Our guides to writing charitable objects and the registration process cover that ground, and why applications get refused covers what happens when it goes wrong.
The one thing to watch is your articles. The Commission looks at the whole governing document, not only the objects clause; powers, trustee benefit provisions, dissolution. An article that permits something non-charitable is a problem even if you would never use it, because the test is what could be done under the wording. Our guide to charity governing documents covers what has to be in there.
The route that takes weeks instead of months
This is the part almost nobody tells founders, and it is worth more than everything else on this page.
The Commission’s own guidance says it can normally make a decision in 15 working days where an organisation uses its model wording for objects, shows that its activities are or will be consistent with those objects, shows that any private benefit is incidental and properly managed, and uses its model governing document. Other applications need closer consideration and take longer, particularly where the purposes are novel or at the boundaries of what is charitable.
Applicants who do not qualify for an early decision go into a queue for detailed review, waiting for a case officer to become available. That wait is currently measured in months. So the difference between using the model articles as published and drafting your own is not a matter of style. It is potentially the difference between a decision in weeks and a decision after most of a year.
Two honest caveats. The Commission does not guarantee that any organisation using the model will be accepted as charitable; every case is considered separately. And it publishes no service standard I can point you to confirming the 15 working days still holds under current pressures. Treat it as the route worth taking rather than as a promise.
If you do need provisions the model does not contain, the Commission asks you to make clear what you have changed and why, and suggests taking a solicitor’s help for anything special or complex. Unexplained changes slow an application down more than the changes themselves.
The articles you file are the single biggest thing you control.
Model objects and model articles, submitted with activities that clearly match them, put you in the fast lane. Bespoke drafting nobody has explained puts you in a queue. That is a decision made in an afternoon that determines the next six months, and it is the part of the process where help pays for itself. A free clarity call will tell you whether what you are planning needs bespoke wording at all; most charities find it does not.
What running one commits you to
Two regulators means two of most things, permanently.
Two sets of duties on the same people. Your trustees are also company directors, with duties under the Companies Act alongside their charity law duties. They can still call themselves trustees or the board; the label does not change the legal position.
Two filing deadlines. Accounts go to Companies House within nine months of the end of the accounting reference period, and to the Commission within ten months of the financial year end. Companies House penalties are automatic and start at £150, doubling if you file late in two successive years, and our guide to filing late sets out the consequences on both sides.
A confirmation statement, which has no CIO equivalent. It confirms your company details are up to date and carries a fee of £50 online with the first statement in each twelve-month payment period.
Statutory registers – members, directors, secretaries and PSC information – are kept and maintained, alongside the Commission’s own register entry.
And accounts prepared on the accruals basis under the Charities SORP. A charitable company cannot use receipts and payments accounts, whatever its size, which is a real difference from a small CIO. Our guides to charity accounting and whether you need an audit or an independent examination cover what follows from that.
None of this is unmanageable. It is simply more than a CIO, permanently, and it is the trade-off you are accepting in exchange for a framework that funders, lenders and lawyers already understand. Deciding who is responsible for each of those filings is worth writing into your scheme of delegation on day one rather than discovering the gap at the first deadline.
A structure decision is hard to unpick and easy to get right at the start.
Choosing between a CIO and a company, drafting articles that will not slow your application, and setting up the filing rhythm before the first deadline arrives; that is a few weeks of work now instead of a costly conversion later. Our charity management and governance support covers the whole of it.
