CAICEA 2004
Companies (Audit, Investigations and Community Enterprise) Act 2004
What this means for your business
- Applies to
- United Kingdom
- On this page
- 23 compliance obligations, 4 practical guides across 2 topics
What you must do
23 compliance obligations under this legislation — 3 can result in imprisonment.
Management duties 2
Ensure articles of association include required CIC provisions
If your business is a Community Interest Company, you must make sure its articles of association always contain the provisions that the regulations require (e.g., rules on asset distribution, member rights, director appointments) and do not contain any prohibited provisions. This applies whenever you create the articles or later amend them, and you may be restricted from changing the company's stated objects.
Limit asset distributions and interest to regulator‑set caps
If you run a community interest company you may only give assets to members or pay interest on debts if the regulations allow it, and even then you must stay within any caps the Regulator sets. You need to check the limits published in the Gazette and make sure your accounts and board decisions respect those limits.
Offences and prohibitions 11
Disclose confidential information obtained under compulsory powers
2 years imprisonmentIf your business shares information that was obtained under a statutory requirement (section 15B) about an individual's private affairs or a particular business, without the individual's or the business's consent, you commit a criminal offence. The offence can lead to up to two years’ imprisonment (or up to 12 months on summary conviction in England, Wales and Scotland, six months in Northern Ireland) and an unlimited fine. You may escape liability only if you had no knowledge the information came from a section 15B request and could not have suspected it, or if you took all reasonable steps to avoid the breach.
Disclose restricted information unlawfully
Fine up to £1,000If you share information that you have been told must not be further disclosed, you commit a criminal offence. The offence applies to any person who breaches a restriction on further disclosure under this Act. On conviction in the magistrates' court you face a fine of up to level 3 (£1,000).
Fail to give registrar notice of court application or order
Fine up to £1,000If your company applies to court to cancel resolutions when becoming a community interest company, you must immediately notify the registrar of Companies House and, within 15 days of the court’s order, send a copy of that order. Failing to do so makes the company and any officer who is in default liable for an offence. On conviction you face a fine of up to £1,000 (level 3) and a daily default fine for continued breach.
Fail to give required notice to registrar when ceasing as a CIC
Fine up to £1,000If your community interest company applies to the court to cease being a CIC or receives a court order to do so, you must immediately notify Companies House and, within 15 days of the order, send a copy of that order. Failing to give the notice or the copy is a criminal offence for the company and any officer who is in default. On conviction you face a fine of up to £1,000 (plus a daily default fine of up to £100 for each day the breach continues).
Fail to notify regulator when a regulator‑appointed director leaves
Unlimited fineIf your community interest company does not send the regulator the required notice within 14 days when a director appointed by the regulator stops being a director (unless the regulator removes them), the company and any officer who is in default (including shadow directors) commit a criminal offence. On conviction you face a summary‑court fine up to an unlimited amount and a daily default fine for each day the breach continues.
Fail to obey regulator’s property order
Unlimited fineIf you breach an order from the Companies (Audit, Investigations and Community Enterprise) Regulator that restricts a community interest company’s property, transactions or payments, you commit a criminal offence. Conviction is dealt with in the Magistrates’ Court and can result in a fine up to level 5 (unlimited). No prison term is provided for this offence.
Obstruct a company inspector or investigator
Unlimited fineIf anyone intentionally blocks or interferes with a duly‑authorised inspector or investigator when they try to enter or stay on premises, that person commits a criminal offence. On conviction the offender faces an unlimited fine. No custodial sentence is mentioned in the provision.
Officer liable for corporate offence committed with consent or neglect
If your company breaches an offence under section 48, section 59 or paragraph 5 of Schedule 7 and an officer (director, manager, secretary or similar) either consents to it, turns a blind eye, or is neglectful, that officer is also guilty of the offence. The officer can be prosecuted and punished in the same way as the company.
Provide false information to a CIC investigator
2 years imprisonmentIf a person is asked by a community‑interest‑company (CIC) investigator to give information and they knowingly or recklessly supply false material details, they commit an offence. On conviction the offender can be sentenced to up to two years’ imprisonment, an unlimited fine, or both. The offence can be tried either in the Crown Court or, for less serious cases, in a magistrates’ court.
Unauthorised disclosure of information obtained in an investigation
Unlimited fineIf you disclose information that was obtained under a Section 447 investigation to anyone who is not listed in Schedule 15C or covered by Schedule 15D, you commit a criminal offence. On conviction you face unlimited fines and/or imprisonment. The offence applies to any person who receives or passes on the information, including companies and their officers.
Unauthorised disclosure of tax information
2 years imprisonmentIf your business receives information that HMRC has disclosed to a prescribed body and you share that information with anyone other than the person it relates to, you are committing an offence (unless you genuinely didn’t know it came under this provision or took all reasonable steps to avoid it). On conviction you can be sentenced to up to two years in prison and face an unlimited fine, or a shorter term and a fine on summary conviction.
Registration and licensing 9
Apply to become a community interest company
If you want your company to be a Community Interest Company (CIC) you must submit a formal application to the Regulator. Your company’s articles, name and purpose must meet the statutory criteria, and you must show you’ll satisfy the community interest test and are not an excluded type.
Convert your CIC into a charity
If you want your community interest company to stop being a CIC and become a charity, you must pass a special resolution, amend the articles, rename the company, meet the voting and court‑application conditions, and then file the resolution and supporting documents with Companies House.
Ensure your company meets CIC eligibility requirements
If you want to set up a community interest company, you must make sure your articles, name and purpose satisfy the statutory tests so that the Regulator will approve. This is a pre‑regulation step that needs to be completed before you can register or run a CIC.
File application to become a Community Interest Company
If you want your company to change into a Community Interest Company, you must pass a special resolution stating the intent, amend the articles of association, change the company name as required, deal with any court applications about cancelling the resolutions, and then send the application and supporting documents to Companies House. This is a one‑off registration step that must be completed before the company can be recognised as a CIC.
Form a CIC only if eligible and do not register it as a charity
If you want to set up a Community Interest Company (CIC) you must first check that it is a company limited by shares or a company limited by guarantee (with or without share capital) as allowed by the Act. If the CIC is created for charitable purposes you must treat it as a non‑charity – it must not be entered on any UK charity register.
Submit prescribed formation documents when registering a CIC
If you want to set up your business as a Community Interest Company, you must include the specific formation statements that the regulations require with your incorporation paperwork. The Registrar will then send a copy of these documents to the CIC Regulator before the company is registered.
Submit required documents when applying to become a Community Interest Company
If you want to convert your business into a Community Interest Company, you must send an application that includes copies of the special resolutions, the amended articles of association and any conversion statements the regulations require. The registrar will then forward these papers to the Regulator for a decision.
Submit required documents when converting a CIC to a charity
If you want your community interest company to stop being a CIC and become a charity, you must send an application to Companies House that includes the special resolutions, the proposed new articles of association and a regulator’s statement confirming the charity status. The registrar will then forward these papers to the relevant charity regulator and hold them until a decision is made.
Use required suffix in your CIC name
If your business is a Community Interest Company you must include the correct ending in the company name – for private CICs use “community interest company” or “c.i.c.” (or the Welsh equivalents), and for public CICs use “community interest public limited company” or “community interest p.l.c.” (or the Welsh equivalents). This means checking your registered name and, if needed, changing it so it complies with the rule.
Reporting and filing 1
Prepare and file annual community interest company report
If your business is a community interest company, the directors must produce a report each financial year that explains what the company did during the year and includes details of directors' pay. The report must then be sent to Companies House, which will pass it on to the CIC regulator.
Penalties for non-compliance
11 penalties under this legislation. 3 can result in imprisonment. 7 carry an unlimited fine.
Disclose confidential information obtained under compulsory powers
Unlimited fine and/or 2 years imprisonment
Provide false information to a CIC investigator
Unlimited fine and/or 2 years imprisonment
Unauthorised disclosure of tax information
Unlimited fine and/or 2 years imprisonment
Fail to notify regulator when a regulator‑appointed director leaves
Unlimited fine
Fail to obey regulator’s property order
Unlimited fine
Obstruct a company inspector or investigator
Unlimited fine
Unauthorised disclosure of information obtained in an investigation
Unlimited fine
Disclose restricted information unlawfully
Fine up to £1,000
Fail to give registrar notice of court application or order
Fine up to £1,000
Fail to give required notice to registrar when ceasing as a CIC
Fine up to £1,000
Officer liable for corporate offence committed with consent or neglect
Penalty applies
Practical guidance
Our guides explain how to comply with the requirements above.
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 …
Understand CIC asset lock rules
How the CIC asset lock protects community assets, when and how you can transfer assets, and dividend and interest caps …
Social enterprise structures
Compare legal structures for trading with social purpose - CICs, charities, co-operatives, and community benefit societies.
Meet your ongoing CIC compliance obligations
How to stay compliant as a Community Interest Company. Covers annual CIC reports (Form CIC34), asset lock obligations, dividend caps, …
Sections and provisions
92 classified provisions from this legislation.
Duties 19
- s.26 Community interest companies
- s.30 Cap on distributions and interest Community interest companies
- s.32 Articles of association
- s.33 Names
- s.34 Community interest company reports to deliver
- s.36 Formation of company as a community interest company is
- s.36A Formation as community interest company: decision on eligibility is eligible
- s.36B Formation as community interest company: implementation of decision on eligibility is eligible
- s.37 Company becoming a community interest company is
- s.37C Becoming a community interest company: application and accompanying documents
- s.37A Becoming a community interest company: application to court to cancel resolutions not
- s.38 Becoming a community interest company: decision by Regulator is eligible
- s.38A Becoming a community interest company: implementation of decision on eligibility is eligible
- s.54C Ceasing to be a community interest company and becoming a charity: application and accompanying documents and become a charity
- s.54A Ceasing to be a community interest company and becoming a charity: application to court to cancel resolutions ceasing
- s.54 Ceasing to be a community interest company and becoming a charity is
- s.55A Ceasing to be a community interest company and becoming a charity : consequences of Regulator’s decision is eligible
- s.55 Ceasing to be a community interest company and becoming a charity: decision by Regulator is eligible
- s.61 Orders made by Regulator in relation
Offences and penalties 11
- Schedule 2 Minor and consequential amendments relating to Part 1
- s.15A Disclosure of information by tax authorities
- s.15C Restrictions on disclosure of information obtained under compulsory powers
- s.23 Power to enter and remain on premises
- s.37B Becoming a community interest company: notice to registrar of court application or order
- s.45 Appointment of director
- s.48 Property
- s.54B Ceasing to be a community interest company and becoming a charity: notice to registrar of court application or order
- s.59 Information
- s.60 Offences
- Schedule 7 Community interest companies: investigations
Powers 19
- Schedule 3 Regulator of Community Interest Companies
- s.13 Power to specify bodies who may issue reporting standards
- s.15B Power of prescribed body to require documents, information and explanations
- s.15E Power to amend categories of permitted disclosure
- s.17 Levy to pay expenses of bodies concerned with accounting standards etc.
- s.18A Power to confer exemption from liability
- s.21 Power to require documents and information
- s.27 Regulator
- s.31 Distribution of assets on winding up
- s.42 Investigation
- s.43 Audit
- s.44 Civil proceedings
- s.47 Appointment of manager
- s.49 Transfer of shares etc.
- s.51 Dissolution and striking off
- s.57 Fees
- s.62 Regulations
- s.65 Commencement etc.
- Schedule 4 Appeal Officer for Community Interest Companies
Definitions 8
- s.14 Supervision of periodic accounts and reports of issuers of listed securities
- s.16 Grants to bodies concerned with accounting standards etc.
- s.22 Protection in relation to certain disclosures
- s.28 Appeal Officer
- s.29 Official Property Holder
- s.35 Community interest test and excluded companies
- s.63 Interpretation
- Schedule 5 Official Property Holder for Community Interest Companies Financial year
Exemptions 8
- s.15D Permitted disclosure of information obtained under compulsory powers
- s.39 Becoming a community interest company: English charities
- s.40 Becoming a community interest company: Scottish charities
- s.40A Becoming a community interest company: Northern Ireland charities
- s.46 Removal of director
- s.50 Petition for winding up
- s.52 Re-registration
- s.56 Becoming a registered society