Converting a limited company to a community interest company (CIC) is a decision that shouldn’t be taken lightly.
It’s a process that takes time and effort. It’s also something that’s not easily reversed. That said, Companies House has provided a clear path to make the conversion from limited company to CIC.
Introduction
Are you intrigued by the concept of combining purpose with profitability?
A step-by-step tutorial for changing your private limited company to a CIC is provided on this blog.
Learn about the documentation needed, the special resolutions needed, and the declarations to make, as well as some of the conversion’s potential benefits and drawbacks.
Let’s get started, shall we?
Required Documents and Forms
Several important papers and documents must be submitted in order to convert a private limited company into a CIC. Here are the important ones:
1. CIC37: application to convert a company to a CIC: This document effectively serves as your conversion request.
2. Fill out Change a company name (NM01): to request a name change for your business. After all, doesn’t your new CIC status merit a new beginning?
3. The community interest statement on Form CIC36: demonstrates your dedication to giving back to the community. It must be signed by the first directors of your company.
4. Memorandum of Association: This important document outlines the rules that govern how your business will be run and lists the founding shareholders or members who have consented to be a part of your CIC.
5. Although you can design your own articles of association, the Regulator of Community Interest Companies offers a form that can help you through the procedure. Your final pieces must, however, adhere to certain rules.
These papers must be delivered to the Registrar of Companies along with the necessary payment.
Unique Resolutions
Your business must approve a Special Resolution to Convert to a CIC in addition to submitting the required paperwork.
This resolution signifies your company’s commitment to transition into a CIC and will need to be presented to the Registrar of Companies along with the other documents.
This resolution, which declares your company’s intent to become a CIC, must be submitted to the Registrar of Companies with the accompanying paperwork.
Declarations
Two significant declarations must be made in order to transition into a CIC:
1. Political Neutrality: The first assurance guarantees that your CIC won’t act as a political party or its affiliate.
2. Commitment to Community Benefit: The second proclamation describes the actions your business will take to benefit the community. This involves describing how any surpluses will be used, with the goal of enhancing the neighbourhood.
Both positive and negative aspects
Even if the thought of becoming a CIC is alluring, it’s important to examine the benefits and drawbacks.
The capacity of CICs to blend profit-making with social responsibility is a key benefit.
They are ideal for companies looking to give back and establish a reputation for civic engagement.
But becoming a CIC also entails extra rules to make sure you’re helping your community, which some companies may find onerous. It’s critical to think about whether this profit-purpose balance fits with your company’s objectives.
Final Thoughts
In summary, the transition from a private limited company to a CIC is an exciting and fruitful one, but it demands careful preparation and execution. Although navigating the procedure may appear difficult, armed with this manual, you are prepared to revolutionise your company and have a significant impact on your neighbourhood.
Call us Now
Do not do it alone, Arrange a FREE initial consultation.
Call us today on 0207 953 8913 or complete our enquiry form in order to book a FREE initial CIC consultation. to discuss your CIC Conversion.
Categories: cic formation, Community Interest Companies
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