I’ve been asked a few times – here are the steps:
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Understand the CIC structure:
Familiarise yourself with the concept of a CIC and its legal structure. A CIC is a special type of company that operates for the benefit of the community rather than shareholders. Visit the UK government’s website at https://www.gov.uk/set-up-a-social-enterprise/ to learn more.
Choose a name:
Select a unique name for your CIC and check its availability using the Companies House name availability checker. The name must end with “Community Interest Company” or “CIC.”
Appoint directors:
A CIC must have at least one director, although in my experience having three Directors ensures a more balanced start. Choose individuals who will be responsible for the company’s management and decision-making. Directors have legal obligations, so ensure they understand their roles and responsibilities.
Draft articles of association:
Prepare articles of association, which outline the rules for running your CIC. You can use a template provided by Companies House or seek legal advice to customise the articles to fit your specific needs. I’d recommend that they are unique to the needs of your CIC – there are quite a few examples publicly available online, do your research.
Register the CIC:
Complete the necessary registration forms, including the CIC36 application form and memorandum of association. Submit these documents along with the registration fee to Companies House. Online registration is typically faster and more convenient.
Create a community interest statement:
Prepare a community interest statement that explains how your CIC will benefit the community and how it aligns with the CIC legal requirements. This statement will be part of your application.
Prepare financial documents:
Produce a balance sheet and a financial projection for the CIC’s first financial year. The financial information should reflect the anticipated activities and income of your organisation.
Complete the application:
Fill out the CIC36 application form, providing details about the company’s name, directors, articles of association, and community interest statement. Ensure accuracy and clarity in the information provided.
Register for tax and other obligations:
Register your CIC for corporation tax and other relevant taxes, such as PAYE if you plan to have employees. You may also need to register for VAT depending on your turnover.
Comply with reporting requirements:
As a CIC, you have ongoing reporting obligations. Prepare and submit annual accounts, an annual community interest report, and an annual confirmation statement to Companies House. These reports provide information about the CIC’s financial performance and social impact. It’s important to note that this is a summary of the process, and there may be additional considerations and requirements depending on your specific circumstances.
Always consult the official guidance provided by the UK government and seek professional advice to ensure compliance and a smooth setup process for your CIC. Speaking to people that have or are running a CIC is an essential starting point; then approaching professional advice from an accountant or lawyer familiar with the process.
It will work if you persevere!