A Community Interest Company is one of the quickest ways to give a business a locked-in social mission — CIC formation is faster and more flexible than charity registration, while still signalling that you're in it for more than profit. Here's how to set one up properly.

Before you start: is a CIC right?

A CIC keeps founder control, allows paid directors, and is fast to set up — but it's not a charity, so it can't claim Gift Aid and it pays corporation tax. If your model depends on donations and grants for an exclusively charitable purpose, a charity might suit you better. Our structure guide walks through the choice. Assuming a CIC fits, here's the process.

CIC formation, step by step

CIC formation is really two things happening at once: incorporating a company at Companies House, and getting the CIC Regulator to approve your community purpose. Do them in this order.

  1. Decide limited by shares or guarantee. Limited by guarantee (no shareholders) is common for community-focused CICs; limited by shares suits those who may want investment (with capped dividends). This shapes everything after.
  2. Write your community interest statement. The heart of a CIC application: what your company does and which community it benefits. It must pass the CIC Regulator's "community interest test" — a reasonable person must agree your activities benefit the community.
  3. Understand the asset lock. A CIC's assets and profits are locked to its social purpose — they can't be extracted for private benefit, and on dissolution pass to another asset-locked body. This is permanent, so commit deliberately.
  4. Choose directors and a registered office. At least one director; a real UK address for official post.
  5. Adopt CIC-specific articles of association. These include the asset lock and dividend caps. Model articles exist — but get them right, because they're hard to unpick later.
  6. Register with Companies House. CIC registration is a single filing: you submit the incorporation and the community interest statement (form CIC36) together, and the application is passed to the CIC Regulator for approval. There's a modest fee, and approval takes a little longer than a standard company because of the regulator's check.
  7. Register for corporation tax with HMRC within three months of starting to trade — a CIC pays it like any company.

Then, every year

  • File a CIC34 — the annual community interest report — with your accounts at Companies House, explaining what you did for your community and any director pay.
  • File accounts and a company tax return (CT600), and pay corporation tax.
  • File a confirmation statement like any company.
Set the finances up right on day one A separate bank account, fund-aware bookkeeping, and a clear record of any director pay (which the CIC34 asks about) — get these in place from the first transaction and annual reporting becomes routine rather than a scramble. We set new CICs up properly and handle the CIC34, accounts and tax.

Where we come in

We help social founders decide between a CIC and a charity, get the structure and articles right, handle the CIC formation and registration itself, and run the ongoing CIC34, accounts and corporation tax afterwards — see our CIC accounting services, from £39 + VAT a month. Get started.