How do I register a Community Interest Company CIC?
CIC company formation approval and tax

We will be pleased to form your CIC for our inclusive fee of £144.00 including VAT and filing registration fees.
We need you to complete and sign:

The Companies House application is a postal process.
Not available online.
We will provide you with a package, normally online.
We need information from you as detailed below.

General

  • Decide who will be the founding member(s) promoting and approving the application.
  • One member is enough.
  • Members may be added after incorporation.
  • Ensure that the promoters are generally familiar with the structure and requirements of a CIC.
  • Briefly:
  • Business not purely for private advantage.
  • Any profits or assets are used principally for the benefit of the community.
  • Profits may not be distributed to the members.
  • Community interest test.
  • Asset lock.

What may and may not happen

  • A CIC cannot be a charity.
  • But a charity can set up a CIC subsidiary company.
  • May not engage in political activities.
  • A CIC is normally:
  • Company limited by guarantee - each member guarantees 1 in the event of an insolvent liquidation.
  • Subject to an asset lock - funds go to a predesignated and approved asset locked recipient in the event of a solvent liquidation or discontinuance.
  • In practice this means another CIC or registered charity.
  • But:
  • May have shareholders.
  • May pay dividends to shareholders, subject to limits.
  • see Other model constitutions no.'s 2 to 6, below.
  • May pay Director's Remuneration, reasonable in the circumstances for defined services.

Memorandum and Articles

  • Model Standard Memorandum and Articles, provided in MSWord format, are the simplest way for you to comply with regulations and good governance.
  • 1. Company limited by guarantee with a small membership; model constitution no. 1
  • Memorandum
  • Articles.
  • Check if CIC model constitutions no.'s 2 to 6 apply below.
  • Compulsory articles are shown in red.
  • Make any required amendments to Model Standard Articles not shown in red.
  • Decide whether all members are to be directors - if not, amend standard article 26.3 "Each member of the company shall be a Director".
  • Asset lock article 3- Provide details of a recipient for residual assets on solvent liquidation or discontinuance.
  • In practice the asset lock recipient will be another CIC or a registered charity.
  • 3.5 For the purposes of this Article 3, the following asset-locked body is specified as a potential recipient of the Company's assets under Articles 3.2 and 3.4:
  • 3.6 Name:
  • 3.7
  • 3.8 Charity Registration Number (if applicable):
  • 3.9 Company Registration Number (if applicable):
  • 3.10 Registered Office:
  • Add the company objects to article 5 see below.
  • Otherwise we recommend adopting the Model Standard Articles.
  • Members may subsequently agree to change the Articles.

Other model constitutions no.'s 2 to 6

Article 5 - Objects of the company

  • These need to be drafted by yourselves for CIC Regulator approval.
  • CIC guidance about CIC article 5 Objects says:
  • Unrestricted objects are the default setting.
  • But it is best practice to define them in article 5.
  • If Objects are not clear in the article 5 Objects they must be clear in form CIC36 Declarations on Formation of a Community Interest Company which is the basis for CIC Regulator appraisal and approval.
  • Form CIC36, provided in MSWord format, defines Who-what-how of objectives. These must be reasonably and evidently appropriate as the objectives of a CIC:
  • Who? - define the community which is to benefit:
  • May be geographic or
  • A defined part of UK or another country.
  • What will you do?
  • How will that benefit the community?
  • If you should generate a surplus of funds how will these be applied?
  • We recommend that you prepare objects based on form CIC36 and then transcribe them into article 5 of your Objects.
  • Article 5 Objects should be drafted to the standard of a business plan so that they can inspire confidence in people who are expected to provide funds.
  • Members may subsequently agree to change Objects.
  • "Three bears" approach; the drafting should be just right:
  • Objects should be tight enough to ensure the CIC stays within the original intentions of the founder(s).
  • Not so tight as to cause accusations of straying outside its original purposes.

Legal structure and Tax:

  • Subject to the normal law relating to any company.
  • HMRC say:
  • "As a limited company a CIC is liable to Corporation Tax just like any other company.
  • It will be chargeable on any trading profits
  • (though it will be a question of fact whether or not a particular CIC is trading)
  • and on its investment income and gains.
  • It is eligible for any reliefs which are available to all companies
  • but there are no CIC specific tax exemptions/reliefs available."
  • Additionally subject to The Community Interest Company CIC Regulator.
  • Must satisfy all Companies House and HMRC filing requirements subject to penalties in default.
  • Your existing company may be converted into a CIC; please talk to us.

The Community Interest Company CIC Regulator:

  • Approves.
  • Monitors.
  • Regulates.
  • Enforces.
  • Raises awareness.
  • Ensures that society:
  • Recognises and trusts
  • CIC integrity and excellence.

CIC Regulator guidance

Processing

  • The Companies House application is a postal process.
  • Not available online.
  • We will provide you with a package, normally online.
  • Signed forms need to be returned to us by post or by hand with original signatures.
  • Any pages not requiring a signature may be sent back electronically.
  • Registrations are coming through in about one week
  • but any rejection will add a further week.
  • Please allow for this in your planning.
  • We will try to ensure that applications will not be subject to rejection, query and hold-up.
  • You need to be satisfied that the article 5 Objects and CIC36 form content will be acceptable.
  • The chosen name, if acceptable to Companies House, will be reserved during the formation process as a "Proposed Name".
  • It is not possible otherwise to reserve a name with Companies House except by registering the company.

Accountancy and company secretarial

We will be pleased to support you with accountancy and company secretarial submissions.

  • Subject to penalties in default even if the CIC is dormant:
  • Form AR01 Annual Return; can be filed online.
  • Annual accounts:
  • Must be filed by post; cannot be filed online.
  • Must be filed with form CIC 34 Community Interest Company Report.
  • Filing fee £15.00.
  • Form CT600 Company Tax Return.
  • Subject to penalties in default reduced to nil for nil returns:
  • VAT if you are making vatable supplies.
  • PAYE if you are paying people.
  • Subject to penalties in default but not reduced to nil for nil returns:
  • Construction Industry Scheme CIS if you are paying people in construction.

See penalties details: AR01 - Annual accounts - CT600 - VAT - PAYE - CIS

Contact us about forming your Community Interest Company CIC