What is CIC36 form? It’s a necessity for any social enterprise that wants to structure itself as a community interest company.
All CICs need to fill out the CIC36 form and submit it to the Regulator of Community Interest Companies. It’s an essential part of your company formation.
The form itself is straightforward but you’ll need to pay attention to detail. There are a few key elements that need to be present when you submit your form. Failure to include these elements may result in the denial of your application
We’re going to cover everything you need to know about the CIC36 form. By the end of this article, you’ll know how to fill it out, what to include, where to send it, and anything else required to properly submit the form.
We’re here to help you improve your local community. The CIC36 is one of your first steps in making that happen.
Let’s get started!
What Is A CIC36?
The CIC36 is the form social enterprises need to file if they want to structure as a CIC. Aspiring CICs need to submit this form to the Regulator of Community Interest Companies.
There are four main sections to the form. These sections are sections A, B, C, and D. Each section requires important information that will determine the approval of your company formation.
The main goal of the form is to determine that your CIC is actually going to benefit the “public good”. This is important because of the nature of CICs.
CICs are different than registered charities. They straddle the line between a non-profit organisation and a for-profit company. CICs can generate revenue and encourage investment.
As a result, a lot of care needs to be taken to make sure they’re still serving their respective charitable cause. Her Majesty’s government ensures this happens through regulations put in place by two offices. Companies House and the Regulator of Community Interest Companies both govern the action of CICs throughout the UK.
Section A of the form is the Community Interest Statement. A unique feature of CICs is that they’re designed to serve a specific group of the local community. This can be a group set by geographic or demographic factors.
So, for example, your CIC can be set up to help women in business or it can be set up to help low-income children in a particular borough of London.
This is an important part of the process but you don’t need to go into too much detail. This is just a quick, general statement of who you’re going to serve. If you’re already forming a CIC, the odds are good that you already have an idea of the group you’re looking to impact.
If you haven’t given it much thought yet, it’s a good idea to talk with your other volunteers, potential managers, and potential board members to decide where you’re going to concentrate your efforts.
Section B builds off of the statement you made in Section A. Here, you and your team are going to need to go into detail about your activities. What are you going to be doing daily to impact your local community?
You’ll have to outline what activities you’ll be conducting to create revenue, as well. You’ll need to provide as much detail as possible when you’re filling out this section of the CIC36.
This section will also need to contain a detailed description of how those activities are going to benefit the community. It’s not enough to explain what you’re doing. You’re also “persuading” the Regulator as to why your CIC is important to the community with your application.
There also needs to be a detailed description of what’s done with surplus funds. Some of this can go to investors but CICs must be mindful of the Dividend Cap. Most CICs will reinvest surplus funding back into future projects.
Section C is a small section. There isn’t much required here on your part. The point of this section is a short acknowledgement. The acknowledgement states that the undersigned (i.e. the directors of your CIC) agree that this organisation isn’t affiliated with politics in any way, shape, or form.
Section D is for the signatures of your directors. Anyone who wishes to be a first director of the CIC needs to sign in this section. It’s important that everyone either sign in ink or e-sign the document.
The application will not receive approval if any of the directors’ signatures are typed names.
How Do I Fill Out A CIC36 Form?
Although the form is pretty simple, you’ll be surprised how many times they can be submitted incorrectly. If you’re like most people trying to start a social enterprise, you can’t wait to start impacting your local community. The last thing you want is your charitable efforts being put off because of a mistake on your application.
As a result, we thought it might help to go over some “dos and don’ts” of filling out and submitting the CIC36 form.
What To Do
One of the first steps of your company formation is to make sure the name you want is available. You can do this online by using the Companies House Webcheck. This portal will allow you to search a directory of company names throughout the UK.
Whichever name you choose, you’ll want to make sure it ends with the proper designation. If you’re applying to start a CIC, your company name needs to end in CIC, C.I.C., or Community Interest Company.
Once you’ve filled out the form, you’ll want to go back and cheque to make sure you filled out all sections properly. Re-read your description in Section A. Your description is probably sufficient but it never hurts to go back over it.
You may be able to re-work your community description and make it more clear. Anything you can do to make your benefit to the community more obvious will help your application. Make sure your detailed description in Section B is clear, as well.
Another step that a lot of applicants miss is the surplus statement. Make sure you spell out what your organisation plans to do with surplus revenue and other funds. This statement should be as short and clear as your community statement in Section A.
You don’t want to leave any aspect of your application to chance.
Finally, make sure you read and understand Section C. Once you’ve done that, make sure Section D is signed with the same number of directors mentioned in other parts of your application. This number should be outlined in your IN01 form.
What Not To Do
Section C of your CIC36 application form has some very important statements in it. These statements inform social enterprises that they shouldn’t apply if they’re affiliated with a political party or movement in any way.
This is the biggest “don’t” of the CIC36 form. If you’re looking to form an organisation for any type of political benefit, this isn’t the company structure for you. It might be best for you to talk to an attorney, or our team at KG Accountants, to decide which entity structure would be best for your organisation.
You should also pay attention to your surplus statement in Section B. You may not be able to mention that your surplus funds will be distributed as dividends. If you plan to have your CIC limited by guarantee, you shouldn’t mention surplus funds going to investor dividends.
A financial professional or attorney may be able to guide you if you’re unsure what to put down in your surplus statement.
Can A CIC Have Only One Director?
If you’re hoping to form your social enterprise as a CIC, you’ll also need to make sure you have the correct number of directors. You don’t want to run the risk of having your organisation reclassified as another type of company.
Many people going through the CIC application process ask, “Can my CIC have only one director”? The short answer is: Yes.
A CIC can have one director and shareholder if it’s limited by shares. But, if you plan to limit your CIC by guarantee, that’s another storey. Any CIC limited by guarantee would have to have at least two directors.
Some banks and institutions that provide CIC funding will ask for more than that. It’s not uncommon for these financial institutions to require three board members. It makes sense if you think about it.
Having only two board members could make voting on divided issues a little difficult. Having a third voting board member would create a “majority” when voting on company issues.
Make An Impact Faster
When forming a community interest company CIC, the CIC36 is a very important form. We hope this article helps you get it done right the first time. Providing a positive impact in your local community doesn’t need to be delayed because of something as trivial as application paperwork.
If you need any help with your CIC application process, contact our team at KG accountants. We are your local CIC experts. Members of our CIC Membership programme receive resources for everything from application guidance to funding opportunities.
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Categories: CIC, CIC Company formations, cic formation, cic register, cic register, Community Interest Companies
This was very helpful, thankyou for sharing!