It has been 14 years since the UK government first introduced community interest companies (CICs).
CICs are very popular among social entrepreneurs who want to use business to help their local community. You can read one of our earlier blog posts to find out more about the advantages and disadvantages of CICs.
There are now more than 15,000 CICs in the UK. More than 2500 are formed each year. In fact, some charities, limited companies, co-operatives and branches of the NHS have converted into CICs.
CIC Register and Company formation
Thirty-seven per cent of CIC applications were declined during the 2017/18 year. In this blog post, we’ll share some tips on how to fill your application correctly.
Forming a community interest company (CIC) in the United Kingdom has never been easier. As of March 2019, CICs can now be registered online, rather than only by post.
This allows you to register as a community interest company, at Companies House. The CIC will also be registered with HMRC for corporation tax at the same time.
If your CIC is approved, you will get a certificate of incorporation by email. This shows that your company exists legally. The certificate will show the company number and date of formation.
Requirements for a CIC Registration
- Name and address of the share holder
- The officers can be of any Nationality and can live any where in the world
- Their must be at least a single director and 1 Share Holder
- The registered address must be located in United Kingdom
- The company Name must end with “CIC or Community Interest Company”
Thirty-seven per cent of CIC applications were declined during the 2017/18 year. In this blog post, we’ll share some tips on how to fill your application correctly.
The Community Interest Test
Perhaps the most crucial part of the application is to show clear community benefit. This is what the Office of the CIC Regulator is most interested in when they review applications.
In the guidelines it says that, “A company satisfies the community interest test if a reasonable person might consider that its activities (or proposed activities) are carried on for the benefit of the community.”
This does not mean that every activity carried out by a CIC needs to directly benefit the community. Rather, everything a CIC does should in some way have local benefit.
When writing your community interest statement, make sure you answer the questions below:
- Why is this CIC being set up?
- Which activities will the CIC undertake?
- Who will benefit from these activities?
Why not look at some community interest company examples before writing your own?
An Example of a Community Interest Company
In 2010, NHS Kingston created a community interest company to deliver health services in the local area. It was the first Public Care Trust (PCT) in London to do this.
The Board pointed out the following community benefits:
- The change would cut excess paper work and create a more responsive and flexible organisation.
- Any surplus from efficiency savings could be used to improve the service.
- It would encourage more involvement from the community. This is because staff, patients and carers could all be part of the company. This would lead to more informed and relevant services for the community.
For more examples of CICs, visit the interactive map of social enterprise organisations in the country on the Social Enterprise UK website. You will see how the activities of other CICs provide local benefit.
CIC Formation Checklist
A number of forms need to be filled out as part of the CIC registrations. Make sure you fill these out correctly.
These are:
- Memorandum of Association – This is a short legal statement that confirms the names of those who wish to form the company. Follow this link to find model templates.
- Articles of association – These are the rules of running the CIC. Follow the link to find model templates.
- CIC36 – This form is used to declare community interest and confirm political neutrality
- IN01 – This form is used to register with Companies House. It is advised that you check your proposed CIC name on the Company Name Availability Checker before incorporation. Your company name must end in community interest company, cic or c.i.c.
The Office of the CIC Regulator has put together a short blog to help you get your CIC application right.
Read more blog posts about community interest companies (CICs).
The importance of legal advice
Forming a community interest company should be taken very seriously. Once a CIC is set up, the only way out is to close the company or convert it into a charity. All assets will need to be passed on to a charitable organisation of your choice. It is therefore strongly recommended that you get legal advice before setting up a CIC.
At KG Accountants , we provide a cost-effective, high value solution to meet all of your CIC needs. if you need to register a new CIC then look no further!
All our CIC fees are fixed.
By giving you a fixed and competitive price, we can take the worry away when it comes to running your CIC; allowing you to concentrate on running your organisation.
Arrange a FREE CIC initial consultation.
Call us on: 0207 953 8913
Categories: CIC, CIC Company formations, cic register, Community Interest Companies
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