This should be a read for charities that have already changed legal status to a SCIO as well as those that might wish to consider it.I have thought previously about the momenta quicker way to the International SpaceStation was hit upon and the connection that has to becoming a SCIO. With Tim Peake's return to earth, I revisit the process of becoming a SCIO and an important aspect of it as far as the transfer of property is concerned.I focus here on unincorporated associations, but the issues apply similarly (but slightly differently) to a company changing to a SCIO.

Informed choice about legal form

On the whole we think SCIOs should be the preferred legal vehicle for most new charities as well as being something that existing charities should consider. Of course, as we have blogged on before (November 2014 and June 2016), each charity must identify and select what is the right structure for them and once that is identified, the specific terms of the constitution need to fit and work for that specific charity. If they are not specific or are simply based on a 'model' it can raise the question of what makes the charity distinct.

Becoming a SCIO... and the ease of transferring assets

Existing charities can change legal status and become a SCIO. Often this is referred to as a 'conversion', but in most cases that terminology is legally inaccurate but very neatly summaries what is happening in practice. As part of a 'conversion' to a SCIO we need to think about how the assets and liabilities will move from the existing legal form to the SCIO. 'Conversion' to a SCIO has a neat advantage here.

That neat advantage is an interesting rule (to me at least!) that in a change of legal status by a trust or unincorporated association to a SCIO, ownership of assets will automatically (magically even) transfer from the existing legal form of the charity to the SCIO. At the click of fingers or more accurately the appearance of "SCIO" being noted on the Scottish Charities Register for that particular charity those assets transfer and ownership "vests" in the SCIO. It. Just. Happens. This can have big advantages.

Improving governance... saving cost

If the trust or unincorporated association owns land, to transfer ownership to a SCIO it might be thought necessary to carry out formal conveyancing to document the transfer and thereafter register the documents in the property register. The legal documents, plans and registration dues can total significant amounts and could prove a barrier to a charity undertaking an otherwise good governance move (in ending it having an unincorporated legal form).However, for a change of legal status to a SCIO the rules mean no formal conveyancing is required. Some short and carefully considered documents are indeed needed, but they are short and cost-effective generally and particularly when compared to what is involved with formal conveyancing.

So, it means moving assets from an existing charity to a SCIO can be very streamlined. It is necessary to put in place some paperwork and do it right. But it is short paperwork and not cost heavy at all.

Charities that have converted to a SCIO and have done formal legal conveyancing etc

It is good that you have become a SCIO. However, the formal conveyancing was probably unnecessary. If you wish to have initial confirmation of that for FREE please get in touch as their could be savings for the charity to secure in doing so.

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