If you run a community group, voluntary organisation or social enterprise, you can apply for CIC status from Companies House – the benefits of a CIC are security for your personal assets, the ability to trade and be able to apply for grant funding.
You can find all the information, guidance and forms you need here and HIVE Portsmouth can offer support with your application or answer any specific questions you have.
Collecting your information:
• Your governing document is called your Articles of Association or Constitution; keep as close to the Companies House templates as possible - contact us if you need help
• When applying for CIC status, you need to complete a form CIC36 where you set out your Community Interest Statement, explaining what your CIO will do, who it will help and how – each director will need to sign form CIC36
• A CIC has an Asset Lock, which ensures that all assets remain for the benefit of the community. In the application you will need to nominate an organisation that any assets will transfer to if your CIC dissolves. This needs to be a charity, CIC or other charitable organisation.
• In the application, you need to name a guarantor who will agree to meet the company's debts up to a specific limit if it was to fail
• There are two forms of CIC – limited by guarantee or limited by shares, most CIC’s are limited by guarantee
• You will need to choose a business activity from the list of Standard Industrial Classification (SIC) codes. There is a drop down box, or you can see a list here
• Companies House and the CIC Regulator need to approve any changes made to your Articles
Directors:
• A CIC can be set up with one director and further directors can be added as the organisation grows to take on roles and share their particular expertise
• Choose directors wisely, they need to understand, support and promote your charitable purposes
• It is a good idea to give them more information on understanding the role of a company director
• CIC directors can be paid for their services by the CIC
• You will be asked if any of your proposed directors are on the Companies House Secure Register which means your personal details are protected and not shown online
• Each director is to be named on the application form and for each one you need:
o name;
o address inc postcode;
o date of birth;
o telephone number and email address;
o if they have ever been known by another name;
o if they are or have been a trustee of a charity before
o if applying to HMRC, you will also need their National Insurance number
Other information needed:
• It is good to have an organisation email, website and telephone number - now might be the time to set those up to strengthen your application
• You will be asked for your company address, this can be your address but be aware that this will be publicly available of the register of companies
• You will be asked for a bank account. If you have an existing treasurers account for your group you can use that or this can be left blank if you do not have an account yet. Most banks will not give you a charity account without a charity number.
Starting the application:
• You can register as a CIC online or by post – start here to find information on the forms and costs. The online application form can be found here - you can save and close and come back to the application before submission
• You will be asked to set up a Government Gateway ID and create a password for your application, you will also be asked to create a recovery word in case you forget your password
• The application automatically notifies HMRC; CICs are taxed in the same way as normal companies. They are subject to corporation tax and VAT and a CIC that makes donations to charity can deduct this as a charge when calculating its profit for corporation tax purposes When you submit the application, you will get an acknowledgement and if everything is in order the registration is usually within a few days. If they refuse the application, take note of what is needed and you can re-apply.
Points to note:
• To register your CIC online costs £27 – this is refunded if the application is unsuccessful
• The CIC registration is submitted to Companies House and is subject to general company law but is also approved by the Community Interest Company Regulator
• You can upload supporting information during the application - the form prompts you when to do this and the information needs to be in PDF format.
More reading on how to form a CIC can be found here
A useful webinar from the CIC regulator can be found here
We wish you every success with your application and can introduce you to a thriving network of charities, community groups and social enterprises in Portsmouth.