CIC for Dummies - CIC Meaning and What A CIC Is

CIC for dummies - the meaning of CIC, what it stands for, what a CIC is, how many directors a CIC needs, types of CIC, F36, CIC v charity and more

CIC for Dummies - CIC Meaning and What A CIC Is

This CIC for dummies guide explains the meaning of CIC, what it stands for, what a CIC is, how many directors a CIC needs, types of CIC, Form 36, CIC v charity and everything else you'll need in setting up a CIC.

What is the Meaning of CIC?

The acronym CIC stands for Community Interest Company, which is one of the most common types of non profit organisation in the UK.

What is a CIC?

A social enterprise is a company that uses its profits and assets for the public good. Community Interest Companies (CICs) are probably the most well known.  They are a special type of limited company which exists to benefit the community rather than private shareholders.

How Many Directors Does a CIC Need?

A CIC must have a minimum of 1 director.  There's no maximum.  However, many CICs wish to fundraise and I think that at least some funders may not be willing to make a grant to a CIC with only one director.  However, that's just my opinion and I may be wrong; I often am.  I would suggest 2 or 3 directors, even if only to spread the workload and make sure the company doesn't cease trading, if something untoward should happen to you.

Most people can be directors.  You must be at least 16, but arguably 18 is better, as anyone under this age cannot enter into contracts or sign contracts on behalf of a company.  You cannot be an “undischarged bankrupt” (have active bankruptcy proceedings against you), or be a disqualified director.

Is a CIC a Charity?

CICs are not charities.  The legal definition of charity is narrower than that for a CIC company.  All charities are non profits, but not all non profits are charities.

CICs have more of a 'business' image than charities, can pay board directors more easily, financial reporting is less of a burden, some can issue shares etc, but don't qualify for charity tax reliefs and, whilst you can fundraise, it's more difficult.

Use our step by step guide on CIC versus charity, which gives you the questions to ask yourself and walks you through choosing whether a CIC or charity would be best for you.

What Are the Different Types of CIC Company?

There are 2 kinds of CIC - limited by shares or by guarantee.  Almost everyone chooses a CIC limited by guarantee (LBG).  Only CICs LBG can convert to a charity (Foundation CIO model).  A CIC can have either a large membership or a small membership set of articles.  Almost everyone chooses small membership.

Use our step by step guide on how to convert a private company to a CIC and a CIC LBG to a charity.

Find Funding & Free Resources For Your CIC

Three online directories Funding FinderHelp Finder and Data Finder, 100+downloadable funder lists, 40+ policies, 8 online health checks and huge resource base. And it works for CICs, as well as charities.

Quick, simple and very effective. Nearly half our ratings are 10/10.

Find Funding, Free Help & Resources - Everything Is Free.

Register Now!

How Do I Set Up a CIC Company?

You need to register a CIC with Companies House and the CIC Regulator but the process of registering a CIC covers both.  Use our step by step guide on setting up and registering a CIC for this.

Community Interest Statement (CIC Form 36).  A Community Interest Statement (CIC F36) is what you use to satisfy the CIC Regulator that your company will meet the Community Interest Test.  That is, its purposes are in the community or wider public interest and access to the benefits will not be confined to an unduly restricted group.

CIC Asset Lock.  Your articles also include an asset lock.  That is, on dissolution, the company’s assets must be given to another CIC or a registered charity.  You enter the details of the one you choose.

CIC Company Articles Of Association. Download and complete the appropriate CIC company articles of association.  This is a substantial legal document that can appear quite daunting, but all you really need to do is fill in the blanks, so it’s not as difficult as it might first appear.  In my experience, the vast majority of CICs are Limited By Guarantee and are small membership.

What You Need to Register A CIC Online.  To register your CIC with Companies House, you'll need your community interest statement (CIC F36) and  company articles of association (both in pdf format), the details about your company and directors, and a credit card or Pay Pal to pay the registration fee.

CIC Company Definitions

Here are simple definitions for the main terms you are most likely to come across.

  • Community Interest Company (CIC) - a special type of limited company, which exists to benefit the community rather than private shareholders
  • Limited by Guarantee - a type of company, usually a non-profit, which has guarantors, rather than shareholders.  Usually invests any profit back into the company.
  • Form CIC 36 - application to form a CIC.  You will need to upload this as a pdf.
  • Community Interest Statement - is the Form CIC 36, which is required to confirm that the CIC will provide benefit to the community
  • Articles of Association - written rules about running the company.  In a charity, often referred to as your constitution.  You will need to upload these as a pdf.
  • Memorandum of Association -  a legal statement signed by all initial shareholders or guarantors.  The online system will create this for you.
  • Asset Lock - a registered charity or other CIC that would be given any remaining assets, in the event your company is dissolved.  Enter details into your articles.

Please note that I am not a lawyer, so am not competent to provide professional advice.  Equally, the definitions above are simple summaries of their more complex meanings, as a guide to understanding only.  If you need proper advice, you need to engage a lawyer.

What is a CIC - FAQS

  • What is the meaning of CIC?  CIC stands for Community Interest Company, which is one of the most common types of non profit organisation in the UK.
  • What is a CIC?  A CIC is a special type of limited company which exists to benefit the community rather than private shareholders.
  • What are the different types of CIC?  Most commonly, a CIC can be a company limited by guarantee, or a company limited by shares.
  • What is a CIC Limited by Guarantee?  A CIC limited by guarantee is a company which has no share capital and cannot pay dividends. Usually, the directors agree to meet the company's debts up to a nominal amount, if it became insolvent.
  • What is a CIC Limited by Shares?  CIC companies Limited by Shares are much less common but can pay dividends, albeit subject to a dividend cap.
  • What are CIC large membership articles of association?  Large membership articles are for CICs, which have more members than they have directors.
  • What are CIC small membership articles of association?  Small membership articles of association are for CICs, all of whose directors are members of the company and all of whose members are directors of the company.

Setting Up A CIC - Make It A Huge Success

Eight online health checks, the huge information hub, Quality Mark and 3 online directories.

  • Funding Finder - click through to more funders than any other grants directory, categories for Crisis Funding, Core Funding and Small Charities & Community Groups and 100+ downloadable grant lists.
  • Help Finder – find advice, pro bono support and free services and products, including companies that make financial donations.
  • Data Finder - finds data for funding bids, fundraising research, impact reporting, planning and campaigning.

Quick, simple and very effective.

Find Funding, Free Help & Resources - Everything Is Free.

Register Now!

To access help and resources on anything to do with running a charity, including funding, click the AI Bunny icon in the bottom right of your screen and ask it short questions, including key words.  Register, then login and the in-system AI Bunny is able to write funding bids and download 40+ charity policy templates as well.

This Guide to CICs Doesn't Constitute Professional Opinion

I am not an accountant, nor a lawyer and no advice can be applicable to all organisations, in all circumstances, so this resource is no more than a guide to understanding CICs.  I've summarised the regulatory guidance and augmented this with my own experience and Internet research, but I am not competent to provide professional advice.  I have included links to the source guidance to enable you to check this yourself and, if you think you might need professional advice, use Help Finder to find pro bono support.

Register Now
We are very grateful to the organisations below for the funding and pro bono support they generously provide.

With 40,000 members, growing by 2000 a month, we are the largest and fastest growing UK charity community. How We Help Charities

View our Infographic

Charity Excellence Framework CIO

14 Blackmore Gate
United Kingdom
HP22 5JT
charity number: 1195568
Copyrights © 2016 - 2024 All Rights Reserved by Alumna Ltd.
Terms & ConditionsPrivacy Statement
Website by
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram