What is a Community Interest Company?

You have a choice of whether you register your CIC as a limited company or as a company limited by guarantee. If you are not sure which form would be the best for your business, consult a company solicitor for legal advice before making your applications. You will need to register your business with Companies House and also with the CIC Regulator. A company solicitor can assist you with your registration.

All businesses that purport to be for social purposes must pass a test the community interest test that the CIC Regulator will apply to your application. In addition to the usual forms you must send to Companies House, you must also prepare a community interest statement that the CIC Regulator will use to decide if your company can be registered as a CIC. Your company solicitor can assist you with writing your community interest statement.

A CIC business has some specific characteristics including an ‘asset lock’. This means the company can’t move or otherwise transfer its assets for less than their actual market value. If you company issues shares, any dividend that is paid will be capped at a level set by the CIC Regulator. As well as your annual accounts, you must also submit an annual community interest report that then becomes a public record. This report must show how your company has fulfilled its remit to the community or group it was set up to serve. Your company solicitor can assist you with filing your annual records.

The setting up of a new CIC must be done in accordance with the specific regulations that impact this type of enterprise. It is important to have the support of a company solicitor to help you not only complete the necessary paperwork, but also ensure your business complies with the special rules that govern CICs.

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