Foundation or association CIO?
Will anyone other than the trustees be a voting member of the CIO? No: foundation. Yes: association. It's the same legal form either way.
How they differ
| Foundation model | Association model | |
|---|---|---|
| Voting members | Only the trustees. Optional non-voting "associate" members are allowed | A wider membership. Trustees don't all have to be members |
| Who appoints trustees | Usually the existing trustees | Usually elected by the members, for fixed terms. Other arrangements, such as nominated trustees, are possible |
| Trustee terms | Fixed terms are good practice, but can be indefinite | Elected trustees normally retire by rotation: a third, or the nearest number, at each AGM after the first |
| AGM | No AGM clause. Trustees can call one of their meetings a members' meeting when the law needs a members' decision | First within 18 months of registration, then at most 15 months apart |
| Notice of members' meetings | 14 days. Shorter only if a majority agree and no strict notice rule applies | At least 14 clear days, with a limited exception if 90% of members agree |
| Quorum at members' meetings | The same as for trustee meetings | The model suggests the greater of 5% or three members |
| Changing the constitution | The trustees (who are the members), in writing by all, or by 75% of votes cast at a members' meeting | The members, in writing by all, or by 75% of votes cast at a general meeting |
Fill in the bracketed figures in the models using their guidance notes, within the legal requirements. Under either model, the Commission's written consent is needed first to change the objects, what happens to assets on dissolution, or anything allowing trustees, members or connected people to benefit. Send the Commission the resolution and the amended constitution within 15 days of the resolution.
Telling them apart in practice
Volunteers, supporters and service users don't get a vote just by taking part. Under the association model they become voting members only if the constitution's membership rules admit them.
| If | Then |
|---|---|
| Only the trustees will vote; supporters can still be consulted | Foundation |
| Parents, residents or users expect to elect the committee at an AGM | Association |
| You're converting an existing unincorporated charity with a constitution and a voting membership | Association, says the Commission |
| You're converting a charity run by its trustees under a trust deed | Foundation, says the Commission |
Questions to settle first
- Who can join as a voting member, and how are people admitted, refused or removed?
- Can you run an AGM every year? The association model provides for one. Both models need a register of members.
- Do you want members to elect trustees, and to have a power to remove one between elections? The association model makes removal optional, with a suggested two-thirds vote, written notice and a chance for the trustee to respond.
Either way, the trustees manage the CIO. Members make the decisions the constitution reserves to them, such as changing it, and must use their powers in good faith for the charity's purposes. Association members usually elect some or all of the trustees.
Trustees under both models
- The constitution must name the first trustees.
- The guidance says a CIO should have at least three trustees, and suggests no more than 12.
- An optional clause limits consecutive terms, with three suggested, and allows a return after a break.
- Trustees must be at least 16. The guidance advises against a board made up entirely of under-18s.
- A trustee can't take part in a decision they'd benefit from personally, unless they can't reasonably be seen as conflicted. The models go further: declare the interest, leave the discussion, don't vote, don't count in the quorum.
- For foundation CIOs with fixed terms, the Commission recommends staggering the first terms, for example four, three and two years.
Member liability
Both models make you choose: members contribute nothing if the CIO is wound up, or up to a maximum each, normally a nominal sum like £1 or £10. The law has no preference.
Things that are the same
- Neither exists until the Commission registers it.
- Both send accounts and an annual return every year, whatever their income.
- Both keep registers of members and trustees. In a foundation CIO they're the same people.
Switching later
A foundation CIO can amend its constitution to the association model. Going the other way, members who aren't trustees must agree to give up their membership. Some changes need the Commission's approval.