How to Set Up a CIC | Community Interest Company Guide

Michi Masumi BA.MA
4 days ago
4 min read

Updated: 4 hours ago

Our detailed step-by-step walkthrough, Download How to Set Up a Community Interest Company (CIC) in Medway – A Practical Guide for just £7.50 and get all the tools you need to succeed.

Setting up a Community Interest Company (CIC) in Medway offers a clear path for artists, community organisers, and social entrepreneurs who want to formalise their work for public benefit. Yet, the process can feel overwhelming if you’re unfamiliar with legal structures, Companies House, or the CIC Regulator. This guide breaks down the essentials of registering and running a CIC in Medway, helping you avoid common pitfalls and stay compliant without losing your mind.

What Is a Community Interest Company?

A Community Interest Company is a special type of limited company designed specifically to benefit the community. Unlike a regular limited company, a CIC has an asset lock. This means the company’s assets and profits must be used for community purposes and cannot be distributed to private individuals or shareholders beyond reasonable returns.

Key Features of a CIC

Community Benefit: The company must serve a community purpose.
Asset Lock: Protects assets from being used for private gain.
Limited Liability: Like other limited companies, members’ liability is limited.
Regulated by CIC Regulator: Ensures compliance with community interest rules.

Is a CIC Better Than a Charity?

Many people wonder if a CIC is better than a charity. The answer depends on your goals:

CICs can trade and generate profits while reinvesting them in community projects.
Charities have stricter rules and tax benefits, but limited trading activities.
CICs offer more flexibility for social enterprises that want to operate commercially but with a clear community focus.

Do CICs Pay Corporation Tax?

Yes, CICs pay corporation tax on their profits just like other limited companies. However, they can claim the reliefs and allowances available to businesses. The Asset Lock ensures profits are reinvested for community benefit rather than distributed.

How to Register a CIC

Registering a CIC involves several clear steps. Here’s what you need to do:

1. Choose Your Company Name

Pick a name that reflects your community purpose and complies with Companies House rules. Avoid names that are too similar to existing companies or include sensitive words without permission.

2. Decide on Company Type

You must choose between:

Limited by Guarantee: No shares; members guarantee a small amount.
Limited by Shares: Shares issued, but with restrictions on profit distribution due to the asset lock.

Most community projects choose Limited by Guarantee unless they need to raise capital through shares.

3. Complete Form CIC36

This form includes your community interest statement, explaining how your company will benefit the community. It must be clear and specific because the CIC Regulator reviews it carefully.

4. Submit Articles of Association

Your Articles must include the CIC model clauses, which include the Asset Lock and community interest requirements. You can use standard CIC model articles or customise them with legal advice.

5. Register with Companies House

Submit your application online or by post with:

Form IN01 (company registration)
Form CIC36 (community interest statement)
Articles of Association

Once approved, you will receive a Certificate of Incorporation.

Registering a Community Interest Company (CIC) in the UK directly through Companies House costs £65 for online registration or £86 for paper applications. However, from 1 February 2026, these fees are scheduled to increase to £115 for online and £139 for paper. Other sources mention varying fees depending on the service, with some indicating £27 or £35.

Key Registration Details:

Online Cost (Current): £65 (rising to £115 on 1 Feb 2026).
Paper Cost (Current): £86 (rising to £139 on 1 Feb 2026).
Process: Requires submitting Form CIC36, Memorandum of Association, and Articles of Association to Companies House.
Other Options: Third-party formation agents may charge higher fees for added services.
Conversion Cost: Converting an existing company to a CIC costs £25 by post.

It is recommended to check the GOV.UK website for the most up-to-date official fee structure.

www.gov.uk/government/publications/community-interest-companies-constitutions/cic-model-constitutions-introduction

After Incorporation: Annual Filing Requirements

Once your CIC is registered, you must keep up with ongoing legal requirements to avoid penalties or strike-off.

Key Filings Each Year

Confirmation Statement (CS01): Confirms company details with Companies House.
Annual Accounts: Financial statements prepared according to accounting standards.
CIC Report (CIC34): Describes how the company has benefited the community.
Corporation Tax Return (CT600): Filed with HMRC to report taxable profits.

Missing deadlines can lead to fines or even removal from the register, so set reminders and keep accurate records.

Do CICs Need an Audit?

Most small CICs do not need a statutory audit. According to the Companies Act 2006:

Micro-entities and small companies are generally exempt from audit unless they exceed financial thresholds.
If your CIC receives funding that requires audited accounts, you must comply.
If unsure, consult an accountant or refer to this guide for detailed criteria.

Practical Tips for Setting Up Your CIC in Medway

Get local advice: Medway Council and local community hubs often provide support for social enterprises.
Use clear language in your community interest statement to avoid delays.
Keep good records from day one to simplify annual filings.
Plan your finances carefully to meet corporation tax and accounting requirements.
Consider professional help for legal documents and tax returns if needed.

Setting up a CIC in Medway can be straightforward when you understand the steps and requirements. This guide offers a practical roadmap to help you launch your community-focused company with confidence. For a detailed step-by-step walkthrough, download How to Set Up a Community Interest Company (CIC) in Medway—A Practical Guide for just £7.50 and get all the tools you need to succeed.

Payment link for instant download of our CIC Guide: https://www.theblackarthub.co.uk/_paylink/AZxUtHRW