Charities Bill [HL]

My Lords, the purpose of subsection (9) of the new Section 69I is to make it clear that liabilities of a charitable company or registered society are not affected by conversion to a CIO. Since the process of conversion will not interrupt the legal personality of the entity, liabilities will clearly not be affected, but this subsection is designed to put the matter beyond doubt. In particular, it is designed to highlight that, although a CIO is not a company, it will still be liable for liabilities incurred by the charitable company as a company such as a penalty incurred for late submission of accounts. This would still be the position were subsection (9) not in the Bill because, as I have mentioned, a CIO is the same legal entity as the charitable company or registered society which converted to it. I am grateful to the noble Lord for raising the issue. I trust that that explanation will suffice. On the subject of conversions to CIOs, perhaps I may advise your Lordships’ House that we intend to bring forward an amendment at Third Reading to provide for power to make regulations to enable the direct conversion of a community interest company into a CIO. I hope that noble Lords will welcome that provision. I hope that the noble Lord feels able to withdraw his amendment.