CIO, charitable company or trust? Choosing a structure

Choosing a legal structure is one of the first and most important decisions a new charity makes. It affects who is liable if something goes wrong, who regulates you, and how much administration you carry for the rest of the charity's life. The acronyms make it sound more technical than it is. Here is how to think it through.

Two questions to start with

Most of the decision comes down to two questions.

First, do you want the charity to be incorporated, that is, a separate legal body in its own right? Incorporation gives the charity a separate legal identity, which normally protects trustees and members from personal responsibility for the charity's contractual debts, and lets the charity own property and enter contracts in its own name. It does not shield a trustee from liability for their own breach of duty or misconduct; nothing does, and nothing should.

Second, will the organisation be a charity in law, with exclusively charitable purposes for the public benefit? This guide assumes yes, and covers the charitable structures available in England and Wales. If you are not sure, our guide on setting up a charity starts with that question.

The four main structures

Unincorporated association

A simple, member-run structure governed by a constitution. Quick and cheap to set up, but it is not a separate legal entity, so the trustees can be personally liable for its debts and obligations. Best suited to small, low-risk groups that do not employ staff or hold property.

Charitable trust

Run by a small group of trustees under a trust deed, usually without a wider membership. Also unincorporated, so the same personal-liability point applies. Often used for grant-giving charities and for straightforward, stable purposes where little is likely to change.

Charitable Incorporated Organisation (CIO)

A structure designed specifically for charities, and the usual answer for a new one. It is incorporated, so trustees get the limited liability described above, but for its charity and corporate registration it deals only with the Charity Commission, not Companies House. That single line of registration makes it noticeably lighter to administer than a charitable company.

Being a CIO does not put you outside every other rulebook: like any charity you remain subject to HMRC, data protection, employment, safeguarding and fundraising requirements. A CIO comes in two model forms, a foundation model run only by its trustees, and an association model with a wider voting membership, and you pick the one that suits how you want to be run. Decide that early, because it shapes your constitution.

Charitable company (limited by guarantee)

An incorporated company that is also a charity. It gives limited liability and is a familiar form to banks, funders and anyone drafting a contract, but it is regulated by both the Charity Commission and Companies House, which means dual registration and dual filing. Its trustees are also company directors, which brings them within the Companies House identity verification rules: see our guide on ID verification for charitable companies.

At a glance

What should tip the balance

Lean towards an incorporated structure, usually a CIO for a new charity, if you plan to employ staff, hold a lease or property, enter contracts, or take on any real financial risk. Limited liability matters most in exactly the circumstances where things could go wrong, which is to say the circumstances nobody plans for.

A simple unincorporated structure can be perfectly sensible for a small, informal group with modest funds and no staff, where administrative simplicity genuinely outweighs the liability risk. That is a real judgement, not a failure of ambition.

Also weigh the administrative burden — a charitable company files with two regulators, every year, forever — what your funders expect, and how you expect to grow.

Scotland and Northern Ireland

The structures above are for England and Wales. Scotland has its own incorporated form, the Scottish Charitable Incorporated Organisation (SCIO), regulated by OSCR, and every Scottish charity must register regardless of income — see our guide to setting up and running a Scottish charity. Northern Ireland does not yet have a CIO-style form, so charities there often use a charitable company instead.

If you operate across a border, take advice on where you need to register: our guide to charity law across the four nations sets out the differences.

Frequently asked questions

This guide is general information for trustees and committee members, not legal or financial advice, and every charity is different. Rules can change, so always confirm the current position with the relevant regulator or a suitably qualified adviser before acting. Last reviewed October 2026.