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.
- 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.
- 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 at Companies House by post; cannot be filed online.
- Must be filed with form CIC 34 Community Interest Company Report.
- Filing fee £15.00.
- Best to file a month before the penalty deadline in case there may be problems with the form CIC 34 Community Interest Company Report.
- 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.