Guide
Set up a community interest company (CIC)
How to register a Community Interest Company, pass the community interest test, and complete the required forms. For social enterprises wanting to trade for community benefit with asset lock protection.
A Community Interest Company (CIC) is a special type of limited company designed for social enterprises. CICs trade for community benefit rather than private profit, with legal protections ensuring assets are used for the community.
Before you register, you need to understand:
- What the community interest test requires
- Which CIC structure suits your needs
- What documents you must prepare
CICs are regulated by the CIC Regulator, a separate body from Companies House, who decides whether your company qualifies and continues to meet the community interest requirements.
The community interest test
This is the fundamental requirement for becoming a CIC. You must convince the CIC Regulator that your activities genuinely benefit a community broader than your company's members.
How to define your community
Your community can be:
- Geographic: Residents of a town, county, or region
- Interest-based: People sharing a common interest (environmental protection, arts access, sports participation)
- Characteristic-based: People with shared characteristics (disability, age group, profession)
The key requirement is that your community must be wider than just your members or employees. A group of colleagues at a single company, or members of a private club with restricted membership, would not qualify.
Activities that pass the test
Consider how your activities will create genuine community benefit:
- Providing services to disadvantaged groups
- Creating employment opportunities in deprived areas
- Protecting or improving the environment
- Promoting arts, culture, or heritage
- Delivering education or training
- Supporting community health and wellbeing
Choosing your CIC structure
CICs can be formed as companies limited by shares or by guarantee. Your choice affects how you can raise funding and distribute any surplus.
Which structure should you choose?
Choose limited by guarantee if:
- You want all surplus reinvested for community benefit
- You do not need to attract private investment
- Your funding comes from grants, donations, or trading income
Choose limited by shares if:
- You want to attract investors who expect some financial return
- You are comfortable with the 35% dividend cap
- You want flexibility to raise equity finance in future
Important: You cannot convert between these structures after incorporation. Choose carefully based on your long-term plans.
Social Investment Tax Relief (SITR) - now closed
SITR previously offered investors tax relief for investing in social enterprises including CICs. The scheme closed to new investments from 6 April 2023.
Registration fees
CIC registration costs slightly more than a standard company because the CIC Regulator must review your community interest statement.
Online registration is faster and cheaper. Allow up to 15 working days for postal applications, though most are processed sooner.
Completing Form CIC36
Form CIC36 is your community interest statement - the document that explains to the Regulator why your company qualifies as a CIC. This is placed on the public register, so anyone can see it.
Writing a strong community interest statement
Your statement should clearly answer three questions:
- What community will benefit? Be specific about who you serve (geographic area, interest group, or characteristic)
- What activities will you carry out? Describe the services, products, or support you will provide
- How will these activities benefit the community? Explain the positive impact and outcomes you expect
Tip: Avoid vague statements like "helping the community" - be specific about what you will do and for whom.
Registration process step by step
Before you start
- Check your proposed company name is available on Companies House
- Your name must include 'CIC', 'C.I.C.', or 'Community Interest Company' (Welsh equivalents permitted)
- Gather director and shareholder/member details
- Identify your registered office address (must be in the UK)
Documents to prepare
- Form IN01: Standard company incorporation form
- Form CIC36: Community interest statement (see above)
- Memorandum of association: Signed by all initial shareholders/members
- Articles of association: Must include mandatory CIC provisions - use the model articles from Companies House or adapt them
Submission
Submit all documents together to Companies House. The CIC Regulator reviews your community interest statement. If approved, Companies House issues your certificate of incorporation.
Timeline: Online applications are typically processed within 24 hours if straightforward. Applications requiring additional review may take 2-4 weeks.
The CIC Regulator
Unlike ordinary companies, CICs are overseen by a dedicated regulator who ensures they continue to serve community interests.
The CIC Regulator takes a "light-touch" approach - they do not proactively supervise individual CICs but will investigate complaints and review annual reports. You can contact them for general guidance, though they cannot advise on your specific situation.
What happens after registration
Once registered, you must:
- File annual accounts: Within 9 months of your accounting reference date
- File a CIC report (Form CIC34): With your annual accounts, describing how you have benefited the community
- Pay the annual CIC report fee: £15
- File a confirmation statement: Annually (standard Companies House requirement)
- Maintain statutory registers: Directors, members, and People with Significant Control
The CIC report is unique to CICs - it demonstrates that you continue to satisfy the community interest test and shows stakeholders how you are delivering on your social purpose.
CIC vs charity - which is right for you?
Both CICs and charities pursue social purposes, but they differ significantly:
- Tax treatment
- CICs pay Corporation Tax like ordinary companies | Charities are generally exempt from Corporation Tax
- Gift Aid
- CICs cannot claim Gift Aid on donations | Charities can claim 25% extra through Gift Aid
- Dividends
- CICs can pay dividends (35% cap) | Charities cannot distribute profits
- Purpose requirements
- CICs must benefit a community (broad interpretation) | Charities must have exclusively charitable purposes (13 defined categories)
- Regulator
- CIC Regulator (light-touch) | Charity Commission (more stringent)
- Formation complexity
- Relatively straightforward | More stringent eligibility test
Choose a CIC if: You want to trade for social purpose but need flexibility that charities cannot offer - such as paying dividends to investors, paying competitive salaries to founders, or operating in ways that are not exclusively charitable.
Choose a charity if: Your purpose is exclusively charitable and you want tax advantages including Gift Aid eligibility and potential business rates relief.
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Define your community and purpose
Clearly identify who will benefit from your activities and how. This forms the basis of your community interest statement.
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Choose between limited by shares or guarantee
If you need to attract investment with potential returns, choose shares. For pure reinvestment of surplus, choose guarantee. You cannot change this later.
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Check your company name is available
Search Companies House. Your name must end in CIC, C.I.C., or Community Interest Company.
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Prepare Form CIC36 (community interest statement)
Write a clear statement explaining your community, activities, and expected benefits. This becomes a public document.
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Download or adapt the model articles
Use the Companies House model CIC articles (Schedule 1, 2, or 3 depending on your structure) or adapt them for your needs.
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Submit your application online
File Form IN01, CIC36, memorandum and articles with £65 fee. Allow 24 hours for straightforward applications.
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Register for Corporation Tax with HMRC
Once incorporated, register for Corporation Tax within 3 months of starting to trade.