Community interest companies
Working for society’s benefit
Setting up and running a community interest company (CIC) can be hard work. Before you even start your CIC, you’ll need to draw up a constitution and community interest statement, as well as make sure it meets certain guidelines. But this isn’t a cause for concern – our experts can guide you through the process step by step.
Setting up your community interest company
As with any limited company, you’ll have to register your CIC with Companies House, but your organisation will also need to pass a “community interest test” to become a CIC.
Rather than your company existing to benefit its shareholders and directors, you’ll have to prove that it serves a purpose that supports the community.
In the test you’ll have to consider:
- the purpose of setting up the company
- the activities the company will engage in
- who will benefit?
For example, many CICS support disadvantaged people in the local community, such as unemployed people or low-income families. To express your intentions, we’ll help you:
- complete the registration
- submit your CIC36 form (signed by all directors)
- pay registration fees
- detail how you’ll use funds to further your cause.
Handling your assets with care
Due to the nature of a CIC, the way you handle your assets, finances and dividend payments will be under great scrutiny.
In a CIC’s constitution, there is a clause called a statutory asset lock which means any asset the company owns must be used solely for the benefit of the community and cause.
Similarly, any dividends paid to yourself or other directors will be capped at 35% of distributable profits. This cap is in place to make sure that the right proportion of profits goes straight to the community without the company taking the main benefit.
We can help you manage your assets and finances to ensure you meet all your legal requirements. With our support, you won’t need to worry about stepping out of line — you’ll be able to focus on helping people in your community.
The good news is that the rules around CICs are far more simple than for charities. If you need any advice setting up your community interest company or you’re looking for accounting support to guide you through the process, don’t hesitate to contact us.
To talk about what you need, just drop us a message, and we’ll be right with you.