How to register a community interest company (CIC)

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If you’re thinking of registering your business as a Community Interest Company (CIC) you may be wondering how to do it and what the benefits are.

The good news is that registering as a CIC is quick, easy and inexpensive. So if your business has social aims and supports the community, find out how to register with our step-by-step guide below.

Community Interest Companies at a glance

A limited company with a social mission, benefiting the community rather than shareholders.

Easier to register and operate than a charity, with similar recognition of its purpose.

Lightly regulated, fostering trust and confidence in your enterprise.

CICs cannot be involved in political campaigning or be subsidiaries of political parties.

What is a Community Interest Company?

A Community Interest Company (CIC) is a type of limited company for social enterprises. Unlike a traditional company that prioritises private profit (for the company's owners and/or shareholders), a CIC will use its profits to benefit the community. This focus on community impact means that CICs can address issues like environmental conservation or social inequality, which could make them attractive to socially-minded entrepreneurs.

One of the most appealing aspects of a CIC is its simplicity in terms of registration and operation. Establishing a CIC is relatively straightforward compared to setting up a charity, but the CIC "brand" still provides recognition of the purpose-driven nature of the business.

It also provides light-touch regulation of the sector, which helps inspire more confidence and trust in your enterprise. This means that there are rules to ensure that CICs stay true to their mission of benefitting the community, which means that your customers and donors know that your commitment is genuine.

Be aware that CICs can't be set up as a subsidiary of a political party or be involved in political campaigning. This restriction helps maintain the focus on community benefit without the risk of political bias or influence.

How do I register a Community Interest Company?

CICs are registered with Companies House as companies but it is the CIC Regulator who decides whether an organisation passes the community interest test.

Register as a Limited Company
Provide a community interest statement that explains what your business plans to do and how it serves the community
Put a CIC asset lock in place
Make sure you have an appropriate Memorandum of Articles / Constitution in place
Think about the distribution of shares
Get your company approved by the community interest company regulator
Register your CIC online with Companies House

Register as a limited company to become a CIC

If you are setting up your business as a Community Interest Company, you have to register as a limited company first. This can be limited by shares, by guarantee or as a public limited company. Find out more about setting up a limited company on the Gov.uk website.

What is a community interest statement?

The most important additional document you need to provide when registering as a CIC is a community interest statement, more commonly known as a CIC36.

The CIC36 form outlines the social objectives, interests, and activities of the CIC as well as making various declarations to operation under CIC regulations.

The CIC36 must be signed by all first directors.

Companies already operating as a limited company but switching to CIC status must fill in a CIC37 form.

What is the CIC asset lock?

The CIC asset lock is designed to ensure that the assets of the CIC (including any profits or other surpluses generated by its activities) are used for the benefit of the community.

This means that assets must be retained within the CIC to be used for the community purposes for which it was formed, or, if they are transferred out of the CIC, they must be:

transferred for full market value and the CIC retains the value of the assets transferred
transferred to another asset-locked body (a CIC or charity, a registered society or non-UK based equivalent) which is specified in the CIC’s Articles of Association
transferred to another asset locked body with the consent of the Regulator
done for the benefit of the community

Are CICs allowed shareholders?

Yes, a CIC limited by shares has the option of issuing shares to its members. These shares are allowed to pay a dividend, providing they aren't excessive. The aim is to strike a balance between encouraging people to invest in a CIC without undermining the principle purpose of community benefit. The rate of the dividend cap is set by the CIC Regulator.

It will also be asked to confirm that access to the benefits it provides will not be confined to an unduly restricted group. It is intended to be a light touch test, but you be assessed annually that you have stuck to your aims.

Passing the CIC test

In order to be approved as a CIC, you'll need to satisfy the official Community Impact Regulator in a process termed 'passing the CIC test'. The test will assess your paperwork and confirm your CIC meets its purposes and could be regarded by a reasonable person as being in the community or wider public interest.

If satisfied, the regulator will advise the registrar in Companies House who, providing all the documents are in order, will issue a certificate of incorporation as a CIC.