What do you need to set up a CIC?
A community interest company (CIC) is a business setup to deliver value to the community, not simply profits to shareholders and owners.
A CIC is more than a business to help you make some money; it’s a business that brings services and value to a community. It’s designed to be a hybrid between a business purely for profit and a charity solely for helping others.
So… how do you set up a CIC?
How many people are needed for a CIC?
Step 1: Directors
Every CIC needs directors. You must have at least one, but larger CICs should have multiple directors to help make it easier to make decisions and to ensure that the focus in the CIC stays on the assigned task.
Step 2: Choose a name
Since you are naming a business, it’s helpful to make sure you create a name that’s memorable and explains what you do.
Simply Business offers a business name generator. https://www.simplybusiness.co.uk/business-name-generator/ Use this to create an interesting and unique name. You’ll also need to make sure that the name isn’t already taken.
Trademark infringement can be costly and it will slow down your ability to get your business off the ground. Check that the name you chose is neither identical nor even class to the name someone else has chosen.
Step 3: Register with Companies House
Every business needs to register with the Companies House. You can register online or via post, but either way, you’ll need to fill out the correct forms.
Form IN01 – This form registers your company.
CIC36 – If you application to form a CIC
Memorandum and articles of association these are the rules and structure your CIC will operate under.
The memorandum is created as part of your CIC36. It lists the members’ names.
Articles of association are the rules and goals of the organisation. This is where you will clearly define what our CIC does.
How long does it take to form a CIC?
These documents can be submitted electronically or can be posted to the Companies House. If you submit them on paper, it can take up to 15 days to process. Otherwise, they are often processed electronically in a couple of days.
Statement of Interest
Part of the CIC36, this might be the most important part of the paperwork. Your statement of interest explains to the Companies House and your stakeholders what community you’ll be benefitting, how you’ll benefit them, and what you’re doing to help.
The ‘Asset Lock’
An asset lock is a commitment that the CIC’s assets will only be used for the benefit of the community it was set up to help. If the CIC dissolves, those assets need to be disposed of properly, usually going to another CIC.
Every CIC should have insurance in precisely the same way every corporation should have insurance. This will protect the CIC from lawsuits that can shut everything down and even attach to the assets of the directors.
The CIC Regulator is the final answer
The CIC Regulator is the office responsible for taking care of seeing that your CIC meets all the legal criteria.
The best way to make sure that you do that, and can get all of this paperwork filled out correctly the first time, consider getting the help of an organisation like KG Accountants. We can help you get your CIC setup, create all of your back office accounting, and more.
Reach out to us to let us know how we can help.
By giving you a fixed and competitive price, we can take the worry away when it comes to setting up your CIC; allowing you to concentrate on running your organisation.
Require more information about CIC?
If you would like more information or would like to ask us a question then call us on 0207 953 8913. To ask us a question online click here.
0207 953 8913