Setting up a Community Interest Company

A Community Interest Company (CIC) is a social enterprise that allows individuals and organisations to pursue charitable objectives within a business framework. CICs are designed for those who aim to benefit the community rather than generate profit for private shareholders. If you’re considering forming a CIC, you may also weigh the benefits of establishing a charity (see Charity Formation for more information).

However, it’s important to note that CICs are distinct from charities, particularly in their structure and regulatory requirements. Unlike charities, CICs must register with the CIC Regulator, and their constitutions must adhere to statutory guidelines, including the ‘Asset Lock’ provisions, which ensure that assets are used for the community rather than being distributed to shareholders or directors.

At Mounteney Solicitors, we understand that establishing a CIC can be complex. With our extensive experience, we provide a streamlined and supportive service to guide you through every step of the formation process. Our firm is known for its responsive and approachable service, ensuring that each client receives personalised attention. We have successfully established numerous CICs and are particularly adept at assisting ministries and groups aligning with our Christian ethos.

We tailor our services to suit various budgets, making it possible for organisations of all sizes to benefit from our expertise. Whether you are forming a new CIC or converting an existing entity, we offer both economic and traditional channels to meet your needs.

Forming a CIC offers several advantages, particularly for organisations involved in public sector initiatives or those aiming to create a positive social impact. Some benefits include:

• Enhanced credibility: CICs are increasingly recognised and respected within social enterprise circles, particularly within the public sector. This credibility can open doors to public sector contracts and funding opportunities.
• Asset Lock provisions: The Asset Lock is a unique feature of CICs that ensures assets remain within the company and are used to further its social objectives; this is particularly appealing to donors and investors who want to ensure their contributions are protected.
• Familiar company structure: A CIC operates with a conventional limited liability structure, making it easier for directors, employees and contractors to engage with the organisation. This familiarity can simplify operations and reduce the learning curve for those involved.
• Access to public sector contracts: Many believe that CICs are well-positioned to bid for and secure public sector contracts due to their community-focused objectives and the additional layer of accountability provided by the CIC Regulator.

Forming a CIC involves several steps, and it’s crucial to understand the process to ensure compliance with legal requirements. At Mounteney Solicitors, our CIC formation service is designed to make this process as smooth as possible. Here’s what you can expect:

1. Taking instructions: We begin by understanding your specific needs and objectives, ensuring that the CIC structure will meet your organisation’s goals.
2. Establishing the CIC: We handle all aspects of the registration process, including drafting the necessary documents, ensuring compliance with statutory requirements, and submitting the application to the CIC Regulator.
3. Company secretarial services: For the first year, we provide company secretarial services to help you maintain compliance and manage administrative tasks effectively.
4. Ongoing guidance: We offer ongoing support and guidance to help you navigate the complexities of running a CIC, including understanding the implications of the Asset Lock and preparing the required annual CIC report.

While there are many benefits to forming a CIC, there are also some challenges that should be considered:

• Brand recognition: CICs are not as widely recognised as other forms of social enterprises, such as charities; this may lead to questions or concerns from stakeholders who are unfamiliar with the CIC model.
• Asset Lock implications: The Asset Lock, while beneficial in ensuring assets remain within the organisation, can also impose restrictions on decisions related to property, dividends, and officer pay. It’s important to fully understand these implications before proceeding.
• Administrative requirements: CICs are required to submit an annual report to the CIC Regulator, outlining how the company has benefited the community. While this adds an extra layer of administration, it also enhances transparency and accountability.

Our CIC formation service is designed to be both comprehensive and cost-effective. We aim to provide a seamless experience from start to finish, ensuring that your CIC is set up correctly and efficiently. Our service includes:

• Fixed fee structure: We offer a fixed fee of £300 for our CIC formation service, which includes the Government registration fee. This transparent pricing structure allows you to budget effectively without worrying about unexpected costs.
• First-year company secretarial service: Included in our fee is the first year’s company secretarial service, ensuring that your organisation remains compliant with all necessary regulations.
• Expert guidance: Our team provides expert guidance throughout the process, from initial consultation to ongoing support. Whether you need advice on the implications of the Asset Lock or assistance with the annual CIC report, we’re here to help.

The CIC formation process typically takes around five days to complete. We can often reduce this time frame for a small additional fee if you require an expedited service. We understand that time is of the essence for many of our clients, and we strive to accommodate urgent requests wherever possible.

At Mounteney Solicitors, we believe in providing high-quality legal services at a fair and transparent price. Our CIC formation service is offered at a fixed fee of £300, which includes the Government registration fee. As an unregulated provider, Mounteney Legal Services Limited does not charge VAT, further reducing your costs.

If you’re considering forming a Community Interest Company or need assistance with an existing CIC, don’t hesitate to reach out to our team at Mounteney Solicitors.  With years of experience forming Community Interest Companies, our Manchester Business Solicitors are well-positioned to provide the support and expertise you need.

Our approach is professional yet personal, ensuring we address your specific needs and concerns. We pride ourselves on being approachable and reliable, with a strong track record of delivering excellent service at a cost-effective price.

Our team of Stockport Solicitors are committed to helping you achieve your social enterprise goals, and we are here to support you every step of the way. Whether you are establishing a new CIC or converting an existing entity, we have the skills and experience to ensure a successful outcome.

We offer a range of services tailored to meet your needs and ensure that your organisation is set up for success. Contact us today to learn more about how we can assist you, or visit our offices in Heald Green, Bramhall or Cheadle and Hazel Grove for a personal consultation. Let us help you make a positive impact on your community.