We get this question a lot: Does a CIC need articles of association? The short answer is yes.
The long answer is… part of this blog. Let us walk you though what you need to know.
The two primary documents needed are the Memorandum of Association and the Article of Association.
The Memorandum of Association
The Memorandum is a brief document that attests to the subscribers’ desire to form a corporation and their consent to join it. They agree to purchase at least one share of the company if it’s share-based.
The Articles of Association
The Articles detail important information regarding the internal division of responsibilities between the company’s directors and members, as well as the procedures that must be followed to conduct meetings, appoint directors, and transfer shares.
Basic CIC Structures
There are four basic CIC structures. The first division is limited by shares or limited by guarantee. From there, the structure will need to consider whether there are more members than directors.
CIC Small membership limited by shares
CIC can be limited by shares. This type of membership assumes that the number of members is the same as the number of directors.
It is assumed that directors will make most critical decisions in their capacity as directors rather than as members and that they will serve continuously for an extended period of time without running for reelection.
CIC Large membership limited by shares
The private corporations limited by shares for which all the directors are also all the company’s members should use this model constitution.
It is assumed that directors will make most critical decisions in their capacity as directors rather than as members and that they will serve continuously for an extended period without running for reelection.
CIC Small membership limited by guarantee
The private corporations limited by guarantee for whom all the directors are also all the company’s members are the target audience for this model constitution.
It is assumed that directors will make most critical decisions in their capacity as directors rather than as members and that they will serve continuously for an extended period without running for reelection.
CIC Large membership limited by guarantee
The private firms limited by guarantee have more members than directors are the target audience for this model constitution.
Although it is assumed that the directors will make most day-to-day business decisions, it also offers the members a significant say in the overall governance of the organization.
The Memorandum and Articles of Association storage
The memorandum and articles of association must be filed with the Companies House. Once there, those records are publicly available. Also, the company must maintain copies of the documents at their registered business address or with their assigned registrar.
Can you change the Articles of Association?
Yes, you can, but you have to get the agreement of all the shareholders. You will need to change the Articles if the shareholders agree to it by “resolution”, if a change would make the prior Articles illegal, or if ordered to by a court or regulatory authority.
If the objects of the company change, the Articles must be changed accordingly to accurately inform the Companies House and public of your company’s mission.
All our CIC fees are fixed.
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.
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Categories: cic formation, cic register, Community Interest Companies
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