How to Set Up a CIC: Complete UK Guide 2026

Introduction

So you want to make a difference in your community. Maybe you've got an idea for a youth project, a community garden, a mental health support group, or a social enterprise that tackles a local problem. You know you need some kind of official structure—something that gives you credibility, protects you personally, and allows you to apply for funding.

A Community Interest Company (CIC) might be exactly what you need.

This guide will walk you through everything you need to know about setting up a CIC in the UK. We'll cover what a CIC actually is, how it compares to other structures like charities, the exact steps to register one, and what you need to do once you're up and running.

Here's the good news: Setting up a CIC is far simpler than most people expect. While it might sound complicated, you can realistically complete the process in a single day and have your CIC registered within a week. There's no interview, no complex approval process, and no need for a solicitor.

What is a CIC?

A Community Interest Company (pronounced "kick") is a special type of limited company designed specifically for social enterprises. It was introduced in 2005 to give people a simple, recognisable legal structure for businesses that want to benefit the community rather than just make money for shareholders.

The Community Interest Requirement

The defining feature of a CIC is that it must work for the benefit of the community. This doesn't mean you can't make money—CICs absolutely can and do generate profits. But those profits must be used for community purposes or, if distributed to shareholders, are subject to strict caps.

When you set up a CIC, you'll need to explain exactly how your company will benefit the community. This is called your community interest statement, and it's submitted on a form called the CIC36. The CIC Regulator reviews this statement to ensure your purpose genuinely benefits people beyond just your members.

How CICs Differ from Normal Limited Companies

A CIC is different in three key ways:

1. Community purpose: Everything the CIC does must benefit the community in some way
2. Asset lock: The company's assets are locked for community benefit
3. Dividend cap: If you have a CIC limited by shares, there's a limit on how much profit can be paid to shareholders (currently 20% of paid-up share value per year)

The Asset Lock Explained Simply

The asset lock is one of the most important features of a CIC. It means that the company's assets—money, property, equipment—must stay within the community interest sector.

If your CIC closes down, you can't just divide up the money between the directors. Instead, any remaining assets must be transferred to another CIC, a charity, or another asset-locked body. This protects the community investment and ensures that assets built up for community benefit stay that way.

The structure has been remarkably successful. There are now over 34,000 active CICs in the UK (34,072 as of January 2026), working in everything from renewable energy to childcare, arts organisations to housing projects. You can explore them all in our CIC Directory.

CIC vs Other Structures

Before committing to a CIC, it's worth understanding how it compares to other options. Each structure has pros and cons, and the right choice depends on your specific situation.

CIC vs Charity (CIO)

A Charitable Incorporated Organisation (CIO) is the most common charity structure. It offers significant tax benefits but comes with much heavier regulation.

Choose a charity if:

• Your work is exclusively charitable (relief of poverty, advancement of education, etc.)
• You want Gift Aid on donations (worth 25% extra)
• You want business rates relief
• You're prepared for significant reporting requirements

Choose a CIC if:

• You want to trade commercially while benefiting the community
• You want directors to be paid a proper salary
• You need to move quickly (CICs register in days, charities take months)
• Your purpose is beneficial but not strictly "charitable"

Comparison Table

Is a CIC Right for You?

A CIC is right for you if:

• You have a clear community or social purpose
• You want to trade commercially (sell products or services)
• You want to pay directors and staff properly
• You need to set up quickly (within a week)
• You want to apply for grants and social investment
• You don't need charity tax benefits
• You want a recognised, trusted legal structure

Types of CIC

There are two main types of CIC, and choosing the right one matters. Most community organisations should choose CIC Limited by Guarantee, but let's look at both options.

CIC Limited by Guarantee

This is the most common type of CIC and the one we recommend for most social enterprises.

How it works:

• The company has members rather than shareholders
• Members guarantee to pay a small amount (usually £1) if the company winds up with debts
• There are no shares and no dividends
• Any surplus is reinvested in the community purpose

CIC Limited by Shares

This type of CIC can issue shares and pay dividends to shareholders, but with important restrictions.

How it works:

• The company can issue shares to raise investment
• Shareholders can receive dividends, but these are capped
• The current dividend cap is 20% of the paid-up value of a share per year
• Shares can only be transferred with restrictions (to preserve community purpose)

Requirements to Set Up a CIC

Before you start the registration process, make sure you have everything you need. The good news is the requirements are straightforward.

What You Need

1. At least one director — Legally, you only need one. However, we strongly recommend having at least three directors if you plan to apply for grants. Many funders view single-director CICs with suspicion.
2. A company name — Must end in either "Community Interest Company" (in full) or "CIC"
3. A registered office address — Must be in the UK. You can use your home address, though be aware it will be publicly visible.
4. A SIC code — A Standard Industrial Classification code describes what your business does.
5. A clear community purpose — You'll need to articulate exactly how your CIC will benefit the community.
6. £65 for registration — This is the online filing fee. Postal submission costs £86.

Step-by-Step: How to Register a CIC

Now for the practical part. Here's exactly how to register your CIC, step by step.

Step 1: Choose Your Company Name

Your CIC name must be unique and must end in "CIC" or "Community Interest Company."

Checking availability: Go to the Companies House name checker and search for your proposed name.

Step 2: Decide on Your Structure

Most CICs should be Limited by Guarantee with small membership articles.

Step 3: Write Your Community Interest Statement (CIC36)

The CIC36 form is what makes a CIC different from an ordinary company. It's where you explain how your company will benefit the community.

Step 4: Prepare Your Articles of Association

Your articles of association are your company's constitution. The CIC Regulator provides model articles that you can adopt or adapt.

Step 5: Complete the Incorporation Forms

To register your CIC, you need to submit:

• Form IN01 — Standard company incorporation form
• Form CIC36 — Community interest statement
• Memorandum of Association
• Articles of Association

Step 6: Submit to Companies House

Online (Recommended)

• Cost: £65
• Time: Usually 2-5 working days
• Submit via Companies House Web Filing

After Registration: First Steps

Your CIC is registered—now what? Here's your checklist for the first few weeks.

1. Set Up a Business Bank Account — Don't use your personal account. CIC-friendly banks include Unity Trust Bank, Triodos Bank, and Co-operative Bank.
2. Register for Corporation Tax — You must register with HMRC within 3 months of starting to trade.
3. Consider VAT Registration — You must register if your taxable turnover exceeds £90,000 per year.
4. Get Insurance — Most CICs need public liability insurance at minimum.
5. Create Essential Policies — Safeguarding, GDPR, health & safety, equal opportunities.
6. Set Up Basic Record-Keeping — Registers of directors, members, PSC, minutes, and accounting records.

Ongoing Requirements

Running a CIC comes with ongoing obligations. They're not onerous, but missing deadlines can result in fines.

Annual Filings

1. Confirmation Statement — Due within 14 days of your anniversary each year (£34)
2. Annual Accounts — Due 9 months after your financial year end (free to file)
3. CIC34 Report — Submitted with your accounts explaining community benefit delivered

Common Mistakes to Avoid

1. Choosing the Wrong Structure — Take time to compare your options.
2. Writing a Vague Community Interest Statement — Be specific about who benefits and what you'll do.
3. Not Having Enough Directors — Many funders won't fund single-director CICs.
4. Forgetting Annual Filing Requirements — Put reminders in your calendar.
5. Confusing CIC with Charity — CICs don't get charity tax benefits.
6. Not Understanding the Asset Lock — It's permanent.
7. Using Your Personal Bank Account — Always keep finances separate.

How Much Does It Cost?

Registration Costs

• Online registration: £65 (one-off)
• Postal registration: £86 (one-off)

Ongoing Costs

• Confirmation statement: £34/year
• Filing accounts: Free
• Filing CIC34: Free

The total cost to register and run a CIC in year one is typically under £500, including basic insurance.

How Long Does It Take?

Online Registration

• Typical time: 2-5 working days
• Best case: Same day (rare, but it happens)
• Worst case: Up to 10 working days if queries arise

CICs are significantly faster than charities while still offering community credibility.

The Easy Way: Set Up Your CIC with CIC Tools

If reading this guide has made you think "that's a lot of forms," you're not wrong. There's an easier way.

Conclusion

Setting up a CIC is one of the most straightforward ways to create a formal structure for your community project or social enterprise. Let's recap the essentials:

• A CIC is a limited company with a community purpose, protected by an asset lock
• Registration costs £65 and typically takes 2-5 working days
• You need at least one director (three is better for funding applications)
• Annual requirements are light: confirmation statement (£34), accounts, and CIC34 report
• CICs can make profits, pay directors, and apply for grants

If you've got a social mission and need a credible legal structure, a CIC gives you the best of both worlds: the flexibility of a company with the community credibility of a social enterprise.

You've got the knowledge. Now take action.