What is a CIC?
Community interest companies ( CICs ) A CIC is a special type of limited company which exists to benefit the community rather than private shareholders. To set up a CIC , you’ll need: a ‘community interest statement’, explaining what your business plans to do.
What are the benefits of a CIC?
Compared to a standard company, a CIC specifically provides several advantages:
- 1 A clear commitment to social goals.
- 2 Access to certain forms of finance.
- 3 Limited liability and protection.
- 4 Familiarity.
- 5 Flexibility of limited company structure.
- 6 Continuity of purpose.
- 7 Quicker to set up.
How many CICs are there in the UK?
There are now well over 15,700 CICs on the public register providing community benefit in all business types across the UK.
Where are CIC registered?
A Community Interest Company can be registered in England and Wales, Scotland or Northern Ireland.
Can a CIC be a registered charity?
Can a CIC become a charity or vice versa? The short answer is yes, a CIC can convert to become an incorporated registered charity and, in some circumstances a charitable company can convert to become a CIC. However an organisation cannot be both a CIC and a Charity at the same time.
What are the disadvantages of a CIC?
Disadvantages: The CIC has to comply with the same formalities and ongoing compliance as a limited company, such as the formalities of incorporation, filing accounts, and maintaining the company register. CICs are also subject to further obligations, such as ongoing reporting to the CIC regulator.
What is the difference between a CIC and a charity?
The biggest difference The largest difference between a CIC and charity is the source of funding. A CIC will get most of its income from trade, selling something then reorienting the money into the social enterprise. A charity, on the other hand, will be almost entirely reliant on donations and grants.
How do I register my community interest?
How do I register a Community Interest Company?
- 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.
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.
What is the difference between a CIC and a registered charity?
How do I register a community interest company?
Is CIC better than charity?
Charities can claim relief on most income and gain, and on profits from some activities. They can also claim back tax previously paid on any income they receive – such as the income tax paid on donations. By contrast, CICs don’t get any tax breaks, even if their objects are entirely charitable.
How many directors do you need for a CIC?
For a CIC LBG, you will need at least 2 directors.
Should I set up a CIC or a charity?
CIC Limited By Guarantee – is quicker and simpler to set-up, has more of a ‘business’ image than charities and can pay board directors, but don’t qualify for charity tax reliefs and, whilst fundraising is possible, it’s more difficult.
Why be a CIC and not a charity?
A CIC is expected to make a profit/surplus whereas a charity is considered as a not for profit which should not profit from the work it carries out. CICs are expected to reinvest their surpluses to do more of their work but can also pay a proportion of this out to the owners or investors.