Business
Setting Up A CIC
Apr
The benefits of setting up a community interest company and how to set one up in the UK
A Community Interest Company (CIC) is a type of legal structure that is designed to be used by organizations that are focused on delivering community or social benefits.
These types of companies are becoming increasingly popular as they provide a way for individuals and groups to set up a business that is focused on creating positive social or environmental change, while also allowing them to raise funds and attract investment.
One of the main benefits of setting up a CIC is that it provides a legal framework that allows the company to focus on delivering community or social benefits, rather than just making a profit.
This is because CICs are required to have a “community interest statement” that outlines the specific social or environmental objectives that the company aims to achieve.
This means that the company’s profits must be used to further these objectives and cannot be distributed to shareholders as dividends.
Another benefit of setting up a CIC is that it can help to attract investment and funding.
This is because CICs are eligible for certain types of funding that may not be available to other types of organizations, such as grants from the government or charitable foundations.
Additionally, CICs can issue community shares, which allow members of the public to invest in the company and become involved in its activities.
To set up a CIC, there are a few key steps that you will need to follow.
First, you will need to decide on the legal structure of your organization, and choose whether you want to set up as a company limited by guarantee or a company limited by shares.
Next, you will need to register your company with Companies House and the CIC Regulator, which is responsible for overseeing CICs.
Once your company is registered, you will need to create a community interest statement that outlines the specific social or environmental objectives that your company aims to achieve.
This statement will need to be approved by the CIC Regulator, and will be used to guide the activities of your company.
Finally, you will need to set up your company’s governing documents, such as its articles of association and memorandum of association.
These documents will set out the rules and procedures that your company will follow, and will be used to guide its operations.
In summary, setting up a Community Interest Company (CIC) can be a great way to create a business that delivers community or social benefits while also attracting investment and funding.
The key steps to setting up a CIC include deciding on the legal structure, registering the company with Companies House and the CIC Regulator, creating a community interest statement, and setting up the company’s governing documents.
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