A CIC is expected to make a profit/surplus whereas a charity is considered as a not for profit which should not profit from the work it carries out. CICs are expected to reinvest their surpluses to do more of their work but can also pay a proportion of this out to the owners or investors.
Can you be a CIC and a charity?
No. A community interest company (CIC) must be a limited company. This means that an unincorporated charity including charitable trusts cannot convert to a CIC. … A charity could not transfer its assets to become part of the corporate property of a community interest company (CIC).
Is a CIC an exempt charity?
CICs are not charities and are regulated by the Regulator for Community Interest Companies (RCIC), not the Commission. … A CIC cannot convert to a charitable company unless we have issued a statement confirming that, should the CIC convert, it would be a charity and would not be an exempt charity.
Can a CIC make profit?
A community interest company (CIC) limited by guarantee is a ‘not for profit’ company, this means that it does not operate for private profit. Any profit generated is used to grow and develop its business which is benefiting an identified community, or goes directly to benefit that community.
How much does it cost to set up a CIC?
Enabling you to register your company name with Companies House, register with HMRC for Corporation Tax and gain approval from the CIC Regulator to form a CIC , all at the same time. The filing fee for an online incorporation for a CIC is £27 and is payable by card or PayPal.
Can a CIC pay its directors?
2. CIC Directors may be paid for their services. … However, many CICs will be actively trading businesses that need good directors if they are to be successful. Such CICs will usually need or wish to remunerate their directors in order to ensure that they achieve their full potential to benefit the community.
Can a CIC own property?
The CIC or charity can own property, and rent space to the other. One of the other reasons why you might want both is because part of your work is charitable, and part of it isn’t – so it wouldn’t qualify to be delivered within the charity.
Can a CIC claim gift aid?
A CIC cannot apply to Inland Revenue for Gift Aid status. If a CIC donates surpluses to a charity it will be able to deduct the amount of any such donations as a “charge” when working out its profits for corporation tax purposes.
How much tax does a CIC pay?
Unlike a charity, a CIC is not entitled to any specific corporation tax exemptions. Accordingly, a CIC’s profits are fully taxable unless it can be shown that the terms of the contract are such that, in tax law, the organisation does not amount to a taxable trade.
Is a CIC trading?
A CIC can also be owned by a charity in the same manner as would apply to a Charitable Trading Company, meaning that a CIC can be used as the “trading arm” of a parent charity.
Do CIC companies pay tax?
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.
Can a CIC be sold?
Can you sell a community interest company? … A CIC’s assets have to be retained for community benefit. They can be transferred to another asset-locked organisation in some cases, such as another CIC or a charity.
How long does it take to get a CIC approved?
The application will set out the CIC’s social purpose and the activities it will carry out to achieve it. Provided there are no issues raised by the CIC regulator or Companies House, the CIC should be registered around two to three weeks from the application date.
How do I get funding for a CIC?
What funding is available for Community Interest Companies?
- http://www.artscouncil.org.uk/funding. Big Lottery Fund. …
- 0845 4 10 20 30. email@example.com. …
- 0345 609 0015. firstname.lastname@example.org. …
- www.can-invest.org.uk. City Bridge Trust.
What do I need to register a CIC?
To set up a CIC , you’ll need:
- a ‘community interest statement’, explaining what your business plans to do.
- an ‘asset lock’- a legal promise stating that the company’s assets will only be used for its social objectives, and setting limits to the money it can pay to shareholders.
What are the benefits of a CIC?
Compared to a standard company, a CIC specifically provides several advantages:
- 1 A clear commitment to social goals. …
- 2 Access to certain forms of finance. …
- 3 Limited liability and protection. …
- 4 Familiarity. …
- 5 Flexibility of limited company structure. …
- 6 Continuity of purpose. …
- 7 Quicker to set up.