1.4 Scottish Charitable Incorporated Organisation

The Scottish Charitable Incorporated Organisation (SCIO) is a somewhat new legal structure having only been introduced in 2011. Traditionally if an organisation applying for charitable wished to be incorporated (please see section 1.1) it would adopt the company limited by guarantee structure. However, in addition to being regulated by the Office of the Scottish Charity Regulator (OSCR), companies are also regulated by Companies House, the official registrar of private and public companies in the UK. Recognising a need for charities to be able to incorporate without the burden of reporting to two regulators, the SCIO structure was introduced by the Scottish Government in 2011 and is proving a popular model with approximately half of all applications for charitable status being SCIOs (July 2018). The key characteristics of a SCIO are detailed in the below table.

Key characteristics of a SCIO
Is this legal structure incorporated? Yes
Can this legal structure be a charity? A SCIO can only exist with charitable status. Should charitable status be revoked, the SCIO must dissolve.
Who are the regulators? SCIOs are regulated solely by OSCR.
What is the key legislation? Charities and Trustee Investment (Scotland) Act 2005.
Is there a registration fee? No. Applications for charitable status are free of charge.
What type of governing document is required SCIO constitution.
What is the membership structure? SCIOs may have a single tier structure (governed by charity trustees with no additional members) or a two tier structure (governed by charity trustees who are elected by a membership). OSCR typically have no preference on which structure is selected.
What are the annual reporting requirements? As with all charities, a SCIO must submit to OSCR a Trustees’ Annual Report, completed Annual Return form and externally scrutinised accounts.
What are the accounting requirements? Providing its constitution doesn’t state that it should prepare accrued accounts and its income is under £250,000, a SCIO can prepare accounts on a receipts and payments basis.
Are there any specific duties or requirements? A SCIO’s constitution must contain certain information including:
  • A statement that its principal office is, and will remain in, Scotland.
  • Details of how a person can become a member, how trustees are appointed and how both can withdraw or be removed from their positions as charity trustees or members.
  • Procedures for dealing with any conflict of interest.
Additionally SCIOs are required to keep a register of trustees and members (if two tier) which must be updated within 28 days of any change being notified. Only a member or charity trustee can request a copy of the register of members (addresses can be omitted if the request is by a member) but any person can request a copy of the register of trustees which must be provided within 28 days, either in electronic or hard copy format.

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