How long does it take to set up a community interest company?

Furthermore, CICs cannot be formed electronically. We have to submit documents by post. So it can take up to four weeks to complete the process. On the other hand, companies limited by guarantee (whether or not they are to be charities) can be registered electronically.

Can a CIC make a profit?

A community interest company (CIC) limited by guarantee is a ‘not for profit’ company, this means that it does not operate for private profit. Any profit generated is used to grow and develop its business which is benefiting an identified community, or goes directly to benefit that community.

How much does it cost to set up a CIC?

Enabling you to register your company name with Companies House, register with HMRC for Corporation Tax and gain approval from the CIC Regulator to form a CIC , all at the same time. The filing fee for an online incorporation for a CIC is £27 and is payable by card or PayPal.

How does a community interest company work?

A community interest company is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or the community, rather than being driven by the need to maximize profit for shareholders and owners.

Can a CIC pay its directors?

A major advantage of CICs is that their directors can be paid a salary, which means that the founders of the CIC can retain strategic control of the enterprise by sitting on the board as paid directors.

Does a community interest company pay tax?

CICs are taxed in the same way as normal companies. They are subject to corporation tax and VAT and a CIC that makes donations to charity can deduct this as a charge when calculating its profit for corporation tax purposes.

How many directors must a CIC have?

Number of directors A CIC limited by shares can have just one director and shareholder. A CIC limited by guarantee should have at least two directors (trustees). Some banks or funding bodies will prefer there to be at least three.

Does a CIC need a company secretary?

All CICs must be one or other of the two most common forms of company: A company limited by guarantee, or • A company limited by shares. Please note a private company does not need a company secretary, but if it does appoint one, the details must be delivered to the appropriate Registrar.

How are community interest companies funded?

A Community Interest Company (CIC) limited by guarantee with no share capital (CLG) has no shareholders. CLGs usually raise funds through grants or donations, rather than from shareholders.

When was the first community interest company created?

A Community Interest Company (a ‘ CIC’) is a corporate vehicle which was introduced under companies legislation in 2005, specifically for social enterprises and/or ‘not for profit’ projects.

How to set up a Community Interest Company ( CIC )?

How to set up a CIC. You can apply to set up a CIC by paying the application fee and completing a form – see here. You’ll have to state the social purpose of the enterprise and the activities the CIC will carry out to achieve this goal. Article of associations and details of directors is also required.

What makes a Community Interest Company a social enterprise?

Community Interest Companies are a form of social enterprise which utilise the power of business to benefit their chosen community through the provision of services or the improvement of the local environment. Social enterprises operate with the interest of the disadvantaged at heart, and use private enterprise to generate funds for their cause.

Why do community interest entities need to be registered with Companies House?

Like with regular businesses, community interest entities have to be registered with Companies House and are party to all normal filing requirements. They are also liable to the same penalties should there be any irregularities. One key component of starting-up of a CIC enterprise is known as asset lock.