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:
- CIC36 form
- Memorandum; Company limited by guarantee with a small membership.
- Articles: model constitution no. 1 see others below.
- Points of focus are:
- Articles- Article 5 and CIC36 form, both of which detail:
- What you will do.
- How each activity will benefit your defined community.
- Articles - Article 3; the asset lock; precise details of the beneficiary.
The Companies House application is either:
A postal process or
An online process.
There are protracted delays in Companies House post processing, recently four weeks, so online is preferable.
We will provide you with a package, normally online.
We need information from you as detailed below.
- 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.
- 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.
- 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
- 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:
- 3.8 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
- 2. limited by guarantee with a large membership.
- Limited by shares.
- Schedule 2 will only pay dividends to asset-locked bodies.
- 3. with a small membership.
- 4. with a large membership.
- Schedule 3 will pay dividends to shareholders.
- 5. with a small membership.
- 6. with a large membership.
- Check CIC Schedule 2 and 3 statute, below
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:
- Raises awareness.
- Ensures that society:
- Recognises and trusts
- CIC integrity and excellence.
- Registrations in normal times coming through in about one week. Covid-19 has lead to extreme delays.
- but any rejection will add a further week or applicable delayed cycle.
- 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 CS01 Confirmation Statement; can be filed online.
|File Online||By post|
|We can prepare your annual accounts for approval; then we only need your email with the following details:||Financial Statements must be filed with form CIC 34 Community Interest Company Report.|
|Form CIC 34 extracts:
PART 1 - GENERAL DESCRIPTION OF THE COMPANY'S ACTIVITIES AND IMPACT In the space provided below, please insert a general account of the company's activities in the financial year to which the report relates, including a description of how they have benefited the community.
|PART 2-CONSULTATION WITH STAKEHOLDERS- Please indicate who the company's stakeholders are; how the stakeholders have been consulted and what action, if any, has the company taken in response to feedback from its consultations? If there has been no consultation, this should be made clear.|
|The other parts 3 to 5 we should already have once the accounts are completed:|
|PART 3 DIRECTORS REMUNERATION|
|PART 4 TRANSFER OF ASSETS OTHER THAN FOR FULL CONSIDERATION|
|PART 5 -SIGNATORY|
|Filing fee £15.00, by debit card.||Filing fee £15.00 by cheque.|
|Best to file allowing a month before the penalty deadline in case there may be problems with the form CIC 34 Community Interest Company Report.|
|Financial statements and Community Interest Annual Report appear on the public record within a few minutes.||Accounts take fourteen to twenty-one days to appear on the public record.|
- 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.
about CIC forms
CIC37: Application to convert a company to a CIC
CIC36: Application to form a community interest company
CIC14: Altering the objects of a community interest company
CIC34: Community interest company report
Social audit report