How to set up a CIC in the UK
A Community Interest Company (CIC) is a limited company for people who want to use business methods for community benefit. Here's how to set one up, step by step.
1. Check a CIC is right for you
A CIC suits groups that want to trade, earn income and keep control with a small board of directors. It can't register as a charity and doesn't get charity tax reliefs. If you mainly rely on grants and donations, a charity may suit you better.
2. Choose limited by guarantee or by shares
- Limited by guarantee: no shareholders; members guarantee a small sum. The most common choice for community groups and the one many funders prefer.
- Limited by shares: can issue shares and pay capped dividends to investors. Useful if you plan to raise investment.
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Questions people ask
Can a CIC become a charity?
A CIC can't be a registered charity, but it can convert to a charity in some circumstances. Check the CIC Regulator's guidance.
How many directors does a CIC need?
Legally at least one, but many funders prefer three or more directors who aren't related.
Can CIC directors be paid?
Yes, directors can be paid a reasonable salary, unlike most charity trustees.
Written by Jessie Joe Jacobs. Jessie has worked in the UK voluntary sector for around 25 years and founded the Teesside charity A Way Out. She founded Charity Builder to give small groups the support a local CVS would.