The Charity Commission has received 15 applications from new organisations wishing to register as Charitable Incorporated Organisations, in the first week since applications opened.
And a legal firm has warned that the new CIO structure will create confusion and delays for the charity sector because the Charity Commission is not equipped to cope with demand.
The Commission has now begun accepting applications under the Charitable Incorporated Organisation (CIO) framework, which means that organisations have to register with the Commission but not Companies House.
Fifteen applications have been received since applications opened last Monday.
The CIO structure was billed in the Charities Act 2006 as a ‘best of both worlds’ solution for charities to have certain benefits of being a company without some of the burdens.
'An inconvenience at best'
But Keith Arrowsmith, partner at JMW Solicitors, has warned that organisations wanting to be CIOs face long delays in setting up because of a lack of resources at the Charity Commission.
Arrowsmith said: “For many years, the most popular way to set up a charitable corporate body has been using a ‘company limited by guarantee’ framework, and these can be set up in a single day and start operating right away.
“The Charity Commission has said that applications to establish a CIO should be dealt with within 40 working days – eight weeks. This will be an inconvenience at best and totally impractical for anyone wishing to establish a new charity to provide rapid fundraising relief, for example in response to a disaster or crisis."
He said many legal advisers are concerned for their charity clients, because CIOs have been trumpeted by the government as an easier way of operating. "In fact, it is a nascent structure administered by an under-resourced government body and therefore likely to cause more problems than it solves for most new organisations."
Commission: 'Emergancies can be fast-tracked'
A spokeswoman from the Charity Commision told civilsociety.co.uk that 40 days was "a guideline", and that the umbrella body would be able to complete some registrations much faster.
"Some straightforward applications will be processed more quickly than that," she said. "In genuine emergencies - for example where new charities are set up to respond to a disaster - we are able to speed our process up. In the past, we have registered charities within 24 hours.
"It's important to note that we are unable to register any CIOs until 2 January, as the relevant regulations do not come into legal force until 28 days after they are made."
The spokeswoman insisted that the Commission has been clear in explaining that CIOs will not be the right structure for all charities, and that registering and running a CIO is not as straightforward as running an unincorporated association or trust.
A much-delayed structure
The introduction of CIOs in the Charities Act 2006 followed 15 years of development. The much-delayed CIO structure was originally intended to become available in 2008, aimed particualrly at medium-sized charities that employ staff and/or enter into contracts.
Scotland introduced CIOs in 2011 and by December of that year one-fifth of all new charities were registered as such, via the country's own regulator OSCR.
The Charity Commission for England and Wales started to accept CIOs applications at the start of last week.
