To set up a CIC , you’ll need:
- a ‘community interest statement’, explaining what your business plans to do.
- an ‘asset lock’- a legal promise stating that the company’s assets will only be used for its social objectives, and setting limits to the money it can pay to shareholders.
Does a CIC need an AGM?
Annual General Meetings There is no requirement for a private company to hold an AGM, though some companies’ articles, drafted when there was a statutory requirement to hold an AGM, will still provide for one to be held. In such cases the company must continue to comply with its articles until they are amended.
Can a CIC own another CIC?
Legal forms CICs must be limited companies of one form or another. A CIC cannot be a charity, an IPS or an unincorporated organization. In so doing, it will lose its charitable status, including tax advantages. A charity may own a CIC, in which case the CIC would be permitted to pass assets to the charity.
Can a CIC pay staff?
The directors of a CIC can pay themselves whatever they can argue could reasonably be seen as necessary, as long as they are still fulfilling their social objectives. As determined by the aforementioned ‘light touch’ regulator.
Can a CIC take donations?
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.
Can a CIC receive donations?
A CIC will typically not be dependent on donations and fundraising as it will have a mix of income including contracts, trading income and grants. Whereas a charity is more likely to be dependent on grants, donations and fundraising for a larger proportion of its income.
How is a community interest company set up?
Unlike other companies, a community interest company must also submit form CIC36, signed by all the prospective directors alongside payment of a £35 fee, describing the proposed social purpose of the company and providing various other details. In order for the CIC to be established, this has to be reviewed and approved by the CIC Regulator.
How does CIC Community Interest Company Limited by guarantee work?
Profit and interest can be paid to investors, subject to a maximum of 35% of distributable reserves. CICs can issue performance related loans that pay interest based on their trading results. The interest is capped at 20%. 1 member 1 vote. Control is not concentrated. No owners (shareholders), just members.
What should the name of a CIC be?
The regulator stipulates that the name of the CIC must end in a prescribed designation, such as ‘community interest company’, otherwise the rules that apply to company name are also applicable to CICs. 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.
How does the CIC office work with Companies House?
Therefore, the CIC Office have worked in partnership with Companies House to create and develop an online interactive tool: the tool will visually walk applicants through the process of setting up a CIC online before submission it will also help users obtain a better understanding of what community interest companies are and how they operate
