An SCIO is a special type of charity that combines the features of a company and a charity.
In simple terms, the SCIO (Scottish Charitable Incorporated Organisation) is a legal framework designed exclusively for the Scottish charity sector. It enables Scottish charities to establish themselves as corporate entities, reaping the advantages of limited liability, all without the need to become conventional companies or industrial and provident societies.
This means that even the smallest charities can harness the benefits of formal incorporation, including limited liability and legal capacity. They can own property, hire staff, assume debts, engage in contracts, and perform various other legal actions in their own name, all without the complexities associated with company law.
For newly established charities, the process of applying for charitable status and incorporation is seamlessly integrated, forming a one-stop-shop approach managed by the Office of the Scottish Charity Regulator (OSCR).
Reporting: SCIOs report to both OSCR and Companies House.
Legal Entity: An SCIO is a legal entity with rights like an individual, allowing it to engage in contracts and employ staff.
Liability Protection: Trustees of an SCIO have some protection from personal liability, but not complete protection.
Constitution: An SCIO’s constitution includes essential elements like its office location, membership and trustee rules, charitable purpose, and more.
Differences from Other Charities: An SCIO exists solely due to its charitable status and ceases to exist if removed from the Register. It can’t convert to other forms or merge with non-SCIOs.
Application: An application must be made by two or more people who will be members and may also be trustees. Proposed trustees must confirm their awareness of duties and eligibility.
Approval: If the SCIO meets requirements and passes the charity test, OSCR enters it in the Scottish Charity Register.