CIC to CIO conversion

What is the accounting treatment for a CIC that has converted to a CIO part way through the year?

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I have a client which was a CIC and part way through the financial year it converted to a CIO.  It will exceed the audit threshold for charities, but it didn't require an audit previously.  I have two questions:

  • Is the audit required for the full year or the second part of the year in which it was a CIO?  I think this depends on whether it is considered to be the same entity or two separate entities.  My initial thoughts are that it is the same entity and that it has simply converted from one type of organisation to another, and therefore it should be audited for the full year.
  • Do we need to submit accounts to Companies House for the CIC?  Although the company status on Companies House is showing as converted/closed, it is still showing that accounts are due for the full year.

Many thanks

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By CJS88
05th Jun 2021 14:06

I think the CIO is a new legal entity which has taken over the operations of the CIC.

Have you closed the old bank accounts and opened new ones? If not then watch out, some banks can be awkward and freeze accounts based on what Head office see at Companies House, regardless of conversations with local 'managers'.

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