A Community Interest Company, or CIC, is a type of not-for-profit created by those who wish to run a business for a community benefit, rather than for private profit. A CIC must be registered with Companies House and must also gain approval from the CIC Regulator. CIC’s can be limited by shares or limited by guarantee, but typically take the latter structure.
To register a CIC, you will need to submit Form CIC36 in which you will provide the proposed name, a brief description of the community you wish to benefit and what activities the CIC will carry out and how they benefit the chosen community. This is an important document for the company and is your opportunity to sell your company and its activities to the CIC Regulator. Many applications are rejected for being too vague, or for not convincing the Regulator of the CIC’s community benefits and how these are better served as a CIC instead of a standard limited company. Applications can be submitted online or via post, although we recommend submitting online where possible as your application will be received quicker.
Articles of Association
The Office of the Regulator of Community Interest Companies provides a model constitution for CIC’s. We can assist you with amending the articles to suit your requirements, although it is recommended to stick as closely to the model constitution to avoid complications or errors leading to your application being rejected.
Asset Locked Body
Within your Articles of Association, you will be required to nominate an asset locked body. This can be done at the time of registering the company or at a later date. An asset locked body is another CIC or charity and the purpose of nominating one is to enable them to receive dividends from your CIC and be entitled to receive its assets should it close.
When setting up a CIC, you must ensure that the company name ends in ‘CIC’, ‘C.I.C’ or ‘Community Interest Company’ (if registered in Wales, you can apply the Welsh equivalent). The name must not be ‘the same as’ or ‘too similar to’ an existing company (whether it is a CIC or alternative structure). Selecting an already registered name will result in your application being rejected.
The company must also ensure that it is not an ‘excluded company’, this is a company conducting activities which are not permitted as a CIC:
(a) a political party;
(b) a political campaigning organisation; or
(c) a subsidiary of a political party or of a political campaigning organisation.
The signatures provided must be wet ink signatures, as in signed by hand, or a scanned image of the signature entered into the designated box. Signatures cannot be typed, doing so will cause the application to be rejected.
How Can We Help?
At 1st Choice Incorporations, we are experienced in setting up CIC’s and believe we can help you. You can find out more about our CIC registrations here, or contact us to discuss your needs.