Law guide: Business start-up

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Forming or converting to a CIC

Forming or converting to a CIC

Forming a CIC

A CIC must be a limited company, but can be limited either by shares or by guarantee (see our section on limited companies for more on this).

Forms and guidance are available on GOV.UK.

For postal applications, you will need to send the following documents to the Registrar of Companies:

1. Form IN01 (application for registration)

2. Form CIC36 (community interest statement). The community interest statement must be signed by the first director(s) of the CIC. It contains:

  • a declaration that the company will not be a political party, a political campaigning organisation or a subsidiary of either;
  • a declaration that the company will pursue activities for the benefit of the community;
  • a description of the community or section of the community that the CIC intends to serve;
  • a description of the company's activities and how they will benefit the community; and
  • a description of how any surpluses will be used.

3. The memorandum of association of the CIC. The Regulator of Community Interest Companies has produced model memoranda of association. These state that the subscribers:

  • wish to form a company under the Companies Act 2006;
  • have agreed to become members; and
  • in the case of a company that is to have a share capital, to take at least one share each.

(The subscribers are the initial members for a company limited by guarantee, or initial shareholders for a company limited by shares.)

4. The articles of association. The Regulator of Community Interest Companies has produced model articles of association. A CIC is not obliged to use them, but there are certain regulations that the articles must comply with.

The documents must be sent to the Registrar of Companies with the appropriate fee.

For online applications, you will need to upload PDFs of the CIC36 and the articles of association. This is a combined service allowing you to register your company name with Companies House, register with HMRC for Corporation Tax and gain approval from the Regulator at the same time.

Eligibility

A company is eligible to be a CIC if:

  • its articles state it is to be a CIC and they comply with relevant regulations;
  • its name ends with community interest company, c.i.c, community interest public limited company, community interest plc, or a Welsh-language equivalent; and
  • the Regulator is happy that the company satisfies the community interest test and isn't a political party or political campaigning organisation.

The Regulator must confirm that the company is eligible before the Registrar of Companies can issue a certificate of incorporation. A CIC must satisfy the community interest test when it's formed and continue to do so for as long as it remains a CIC.

A CIC will satisfy the community interest test if it can show that a reasonable person might consider that its activities are being carried on for the benefit of the community.

A company will not satisfy the test if its activities only benefit members of a particular body or its activities are political. Not all of the activities need to have a direct benefit to the community it serves, but everything a CIC does should somehow contribute to benefiting that community.

Converting to a CIC

To convert an ordinary limited company or a charitable company to a CIC, you will need to:

  • pass special resolutions to alter the articles of association so they comply with relevant regulations, to state that it is to be a CIC and to change its name so that it has one of required CIC endings;
  • complete form CIC37 (which contains the community interest statement); and
  • complete form NM01 (notice of change of name).

The community interest statement in form CIC37 is the same as in form CIC36, except that it includes an extra declaration that:

  • (for an ordinary limited company) the company is not a charity, or, if it is, that the Charity Commission have consented to the change of name. The company will cease to be a charity on becoming a CIC; or
  • (for a charitable company) the Charity Commission have consented to it becoming a CIC. The resolutions changing the constitution may also require prior written consent of the Charity Commission under charities legislation. The company will cease to be a charity on becoming a CIC and will be removed from the Register of Charities.

The special resolutions, amended articles of association, and forms CIC37 and NM01 must be sent to the Registrar of Companies with the appropriate fee.

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