Community Interest Company

A CIC is a special type of limited company which exists to benefit the community rather than private shareholders and carries out activities which fulfill a community purpose. This is defined when an application is made to set the CIC up.

There are a huge variety of purposes which meet the so-called “community interest test“. These range from promoting the healthcare of residents of a particular community to promoting climate change awareness programmes or reducing greenhouse gas emissions.

A CIC also has a “lock” on its assets. This prevents profits from being distributed to its members or shareholders other than in certain limited circumstances. It also means that all assets must be used for the community purpose or, if they are sold, open market value must be obtained for them and the proceeds used for the community purpose. In addition, if the CIC is wound up, its assets must be transferred to another, similarly asset-locked body.

The main advantages of being a CIC are that, as a corporate body, a CIC can own property and enter into contracts, personal liability of members is limited and the directors can receive payment (as permitted by the CICs governing document).

Disadvantages are that CICs are answerable to two regulators (Companies House and the CIC regulator) and CICs cannot apply for charitable status.

To set up a CIC, you need to apply to Companies House, and:

If your organisation obtains CIC status, you must make reference to this in your company name.

For more information, please see the following:

Companies House

The CIC Regulator

The CIC Association