How to Set Up a CIC: Complete UK Guide 2026

You have an idea for a youth project, a community garden, a support group or a social enterprise, and you need a structure that gives it credibility, protects you personally and lets you apply for funding. A Community Interest Company is often the right fit.

I co-founded Homeless Aid UK CIC and then built CIC Tools after seeing how confusing the process looks from the outside. This is the route from someone who has done it, not a textbook version. Setting up a CIC is simpler than most people expect: there is no interview, no lengthy approval process and no need for a solicitor.

This whole guide in one video: the real costs, the new director ID checks and all the steps.

A Community Interest Company is a type of limited company designed for social enterprises. It was introduced in 2005 to give people a simple, recognisable legal structure for businesses that exist to benefit the community rather than to make money for shareholders.

The community interest test

A CIC must satisfy the CIC Regulator that a reasonable person might consider its activities are carried on for the benefit of the community. It cannot exist mainly for the financial advantage of its members, for political purposes or for the benefit of its employees. You set this out in your community interest statement, submitted on form CIC36, and the Regulator reviews it as part of your application.

How CICs differ from ordinary limited companies

1. Community purpose: what the CIC does must benefit the community.
2. Asset lock: the company's assets are permanently locked for community benefit.
3. Dividend cap: a CIC limited by shares can pay dividends, but total dividends are capped at 35% of distributable profits. The old 20% cap per share was abolished in October 2014.

The asset lock, explained simply

The asset lock means the company's money, property and equipment must stay within the community interest sector. If your CIC closes, you cannot divide up what is left between the directors. Remaining assets must be transferred to another asset-locked body, such as another CIC or a charity, or used for the community. That protects the community's investment permanently.

The structure has been popular. There are over 34,000 CICs on the register (34,072 in January 2026), working in everything from renewable energy to childcare, arts to housing. You can explore them in our CIC Directory.

Before committing to a CIC, it is worth knowing how it compares to the alternatives. The right choice depends on what you want to do and how you plan to fund it.

CIC vs charity (CIO)

A Charitable Incorporated Organisation is the most common charity structure. It brings significant tax benefits and much heavier regulation.

Choose a charity if your work is exclusively charitable in law, you want Gift Aid on donations, you want charity rates relief, and you are prepared for the reporting that comes with it.

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, or your purpose is beneficial but not strictly charitable.

Fees from the Companies House fees page, updated July 2026. Grant eligibility is set by each funder.

There are two types of CIC. Most community organisations should choose limited by guarantee.

CIC limited by guarantee

• 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. Funders often prefer this structure.

CIC limited by shares

• The company can issue shares to raise investment.
• Shareholders can receive dividends, but total dividends are capped at 35% of distributable profits.
• Performance-related interest on loans is capped at 20%.
• The per-share cap that used to limit dividends to 20% of a share's paid-up value was removed in October 2014.

The requirements are straightforward. Before you start, have these ready.

1. At least one director. Legally one is enough. Many funders prefer at least three, so plan for that if you will apply for grants.
2. A company name ending in “Community Interest Company” or “CIC”.
3. A registered office address in the UK. You can use your home address, but it will be public.
4. A SIC code, the Standard Industrial Classification that describes what you do.
5. A clear community purpose you can explain in a few paragraphs.
6. £115 for the online application, paid to Companies House. A paper application costs £139.

Directors also need to verify their identity with Companies House, a requirement introduced in 2025.

Here is exactly how to register your CIC online, in order.

Your name must be unique on the Companies House register and must end in “CIC” or “Community Interest Company”. Check it here. If it looks available, you can carry it straight into the guided questions.

Most CICs should be limited by guarantee with small-membership articles. Choose limited by shares only if you plan to raise investment and pay capped dividends.

The CIC36 is what makes a CIC different from an ordinary company. It is where you explain what the company will do, who benefits and how. The Regulator reads it, so be specific: activities, beneficiaries, how often, and what any surplus is used for.

Read our full CIC36 form guide for what goes in each section.

Your articles are your company's constitution, including the asset lock. The CIC Regulator provides model constitutions you can adopt or adapt.

The online application asks for the information a paper IN01 form would: each director's details and identity verification, the registered office address, people with significant control, your SIC code and the members' guarantee. You enter these into the form rather than uploading a separate document.

Online, the recommended route. Apply through the Companies House online registration service. You upload two documents, your CIC36 and your Articles of Association, and pay £115 by card or PayPal. A memorandum of association is created automatically as part of the online process.

By post. Send form IN01, form CIC36, your memorandum and articles, and a £139 cheque to Companies House in Cardiff. Paper applications can take up to 15 working days.

Companies House passes your CIC36 to the CIC Regulator, who checks the community interest test. Once approved you receive your certificate of incorporation by email, and you are automatically registered for Corporation Tax.

Your CIC is registered. Here is the checklist for the first few weeks.

1. Open a business bank account. Keep CIC money separate from your own. See our Day 1 Essentials guide for CIC-friendly providers.
2. Confirm your Corporation Tax registration. Registration happens automatically when you incorporate; you must still tell HMRC when you start trading.
3. Consider VAT registration. Compulsory once taxable turnover passes £90,000 in a year.
4. Arrange insurance. Most CICs need public liability cover at minimum; employers' liability is a legal requirement once you employ anyone.
5. Put essential policies in place. Safeguarding, data protection, health and safety, equal opportunities. Funders ask for them. The Formation Pack includes six policy generators; existing CICs can buy the Policy Pack.
6. Set up basic record-keeping. Registers of directors, members and people with significant control, minutes, and accounting records.

Running a CIC comes with annual obligations. They are not onerous, but missing deadlines leads to penalties. Read our full guide on CIC annual requirements and filing deadlines.

1. Confirmation statement, due within 14 days of your review date each year. £50 online, £110 on paper.
2. Annual accounts, due 9 months after your financial year end. No Companies House fee.
3. CIC34 community interest company report, filed with your accounts, explaining the community benefit delivered and any directors' pay. £15, paid to Companies House by card when you file online with your accounts, or by cheque on paper. See our CIC34 guide.

1. Choosing the wrong structure. Take time to compare CIC vs charity and the other options.
2. Writing a vague community interest statement. Be specific about who benefits and what you will actually do. Vague statements get queried.
3. Too few directors. Many funders will not fund single-director CICs. See CIC director requirements and duties.
4. Forgetting the annual filings. Put the confirmation statement, accounts and CIC34 dates in your calendar the day you incorporate.
5. Confusing a CIC with a charity. CICs do not get charity tax benefits.
6. Not understanding the asset lock. It is permanent. Read our asset lock explainer.
7. Using a personal bank account. Always keep the finances separate.

Registration

• Online application: £115, paid to Companies House.
• Paper application: £139.

Ongoing Companies House fees

• Confirmation statement: £50 a year online, £110 on paper.
• Annual accounts: no fee.
• CIC34 report: £15 a year.

Fees from the Companies House fees page. Add insurance and any professional help, and the first year typically comes to a few hundred pounds. For a detailed breakdown see how much it costs to set up a CIC.

Ways to get the documents written

Agent and solicitor figures are typical market ranges, not quotes. CIC Tools prices as of September 2026.

Two clocks run separately: how long the paperwork takes you, and how long approval takes.

• Preparing the documents: most founders finish the CIC36 and articles in one sitting with a tool or template, or over a few days from a blank page.
• Online approval: usually within a few working days once submitted, longer if the Regulator has questions about your community interest statement.
• Paper applications: up to 15 working days.

If reading this has made you think “that is a lot of forms”, there is an easier way. CIC Tools asks plain questions about your organisation, then writes your CIC36 and Articles of Association from your answers in the format Companies House requires. You upload them and pay the £115 fee yourself.

• Free to start, no account needed. You pay £29 only when you download.
• Six policy generators are included, so you are ready for funders from day one.
• Step-by-step submission guidance and a what-comes-next checklist.