Community Interest Companies (CIC)

A Community Interest Company (CIC) is a company structure that uses its profits and assets for public benefit. CICs are structured as companies but have special legal protections to ensure their activities serve the community. They can be limited by shares or by guarantee, and they must meet the community interest test to prove their social purpose.

The Governing document for a CIC is an Articles of Association. Templates can be downloaded here.

There are a range of templates to choose from depending on how you intend to run and make decisions. Some allow for a wider membership to have an influence compared to others that restrict decision making to the board of directors. There are also options to chose between limited by guarantee (more commonly used) and limited by shares.

Key features of a Community Interest Company

The Community Interest Test

The Community Interest Test determines whether a company’s activities benefit the wider community rather than just its owners, employees, or specific groups. A Community Interest Company (CIC) must meet this test by demonstrating that its purpose and activities serve a broad community interest. Activities that solely benefit members or employees, or involve political campaigning, generally do not meet the test.

Your community interest declaration is made on form CIC36.

Tips for completion

• Clearly define your community of benefit
• Outline your planned activities and the benefits to the community or individuals

Sample completed form is available here.

Compulsory Asset Lock

The Asset Lock is a key requirement of a CIC it prevents the organisation's assets, such as profits or property, from being distributed to its members, shareholders, or directors. Instead, these assets must be reinvested back into the organisation or transferred to another asset-locked body if the company is dissolved. This ensures that the organisation’s resources are directed toward its community-focused goals.

When you create your CIC you will need to consider which asset locked body you will nominate to be the recipient of assets within your articles of association. This can be a charity or CIO or another CIC but cannot be a director or a private company.

Useful links

'Do’s and Don’ts' of completing an application to incorporate a CIC

Community interest companies: forms and step-by-step guides

Thinking of setting up a CIC webinar