Charitable Incorporated Organisations (CIOs) have become an increasingly popular structure for charities in England and Wales since their introduction in 2013. They offer the benefits of limited liability while remaining subject to charity law rather than company law.
Over the past few years, significant legal changes have affected how CIOs operate, particularly regarding constitutional amendments. The Charities Act 2022 introduced a range of reforms that have now taken full effect in 2024.
This article explores these regulated amendments, their practical impact, and what we can expect as we move further into 2025.
Key Amendments Introduced by the Charities Act 2022
- Changes to the Amendment Process
Prior to the Charities Act 2022, any constitutional amendment required registration with the Charity Commission before taking effect. The updated law now distinguishes between regulated and non-regulated amendments:
- Regulated Amendments: These include changes to a CIO’s charitable purposes, dissolution clauses, trustee benefits, and any other fundamental provisions. These changes must still be approved by the Charity Commission before they become effective.
- Non-Regulated Amendments: Changes to administrative provisions (e.g., meeting procedures, membership rules) now take effect immediately upon passing a resolution, without the need for Commission registration.
This distinction streamlines the amendment process, reducing administrative burdens for charities while maintaining oversight where necessary.
- Impact on Governing Documents
Existing CIOs must now ensure their governing documents comply with the new regime. The Charity Commission has revised its model constitutions, and charities are encouraged to adopt these updates. From 2024, provisions in CIO constitutions that contradict the Charities Act 2022 are overridden by statutory provisions.
- Wider Powers to Amend Constitutions
Previously, many CIOs were restricted in their ability to amend constitutions, particularly where initial governing documents did not explicitly grant such powers. The Charities Act 2022 provides a statutory right for CIOs to amend their constitutions, aligning them more closely with the amendment powers of charitable companies.
The Practical Impact in 2025
Now that these changes have been in effect for a year, several trends have emerged:
- Charities have reported fewer delays in implementing minor amendments, allowing them to focus on governance rather than administrative hurdles.
- Trustees now have clearer guidelines on which amendments require regulatory approval, reducing the risk of non-compliance.
- Many charities have opted to align with the updated model constitutions, ensuring smoother operations in the long term.
Challenges and Future Considerations
Despite the improvements, some issues remain:
- Regulatory bottlenecks – the Charity Commission still faces resource constraints, leading to delays in approving regulated amendments.
- Interpretation issues – some CIOs have found the distinction between regulated and non-regulated amendments ambiguous, requiring legal clarification.
- Adaptation period – older CIOs that have not yet updated their constitutions may face challenges in ensuring compliance.
Conclusion
As 2025 progresses, CIOs are benefiting from a more flexible regulatory framework. However, trustees must remain vigilant in ensuring their governing documents align with legal requirements. Ongoing engagement with the Charity Commission and professional advisors will be crucial in navigating these changes effectively.
If you need advice on updating or amending your charity’s constitution, or navigating the regulatory changes introduced by the Charities Act 2022, please get in touch today by calling 0800 086 2929, emailing info@elitelawsolicitors.co.uk or by completing our Free Online Enquiry Form.
