Update on ‘Do’s and Don’ts’ of completing an application to incorporate a CIC to include ‘Online’

a person filling a form

Do’s and don’ts of completing an application to incorporate a CIC

Need help with registering your Community Interest Company? We’ve identified the most common mistakes for each document you need to submit and compiled a list of Hints and Tips to get you on your way.

From March 2019 there is now a facility to allow the customer to complete an application and submit it online. It is quicker and easier to set up your CIC online and in-built checks mean you are more likely to get it right first time. The cost for this is only £27!! Compared to £35 for paper.

The ‘Online’ process

This requires the customer to upload two documents only, as the information input during the online journey populates the rest.

During the online process you are only required to upload:

The details regarding company type, the registered office address, director details etc. and Memorandum of association are obtained from information the customer inputs during the online journey.

Applications

The information that follows can, in the main part, apply to both paper and online applications as it highlights common errors across both types.

The Paper application

These are the forms you need:

Send the documents by post to Companies House with the £35 filing fee.

PAPER APPLICATIONS ONLY

The form IN01

This is required for ‘Paper’ applications only

Do

  • check that the company name you want is available by using Companies House Webcheck

  • make sure the company has the name ending CIC, Community Interest Company or C.I.C. and is consistent on all forms

  • tick the correct box in A4 – ensure the box you tick is relevant to the type of articles of association that you are sending.

  • complete Part 5 – give details of the person(s) that will have significant control over the company (PSC). If there will be no PSC in relation to the company still tell us by ticking the correct box.

  • tick L1 – consent statement – to tell us that the subscribers confirm that the people named as a director or secretary have agreed to act in that capacity.

  • make sure that all the CICs subscribers sign part N1 individually OR if the CIC is being represented by an agent, complete section N2

  • will you have more than 2 directors? Then download the IN01 continuation sheet

  • contact Companies House with any queries on the IN01

Don’t

  • Tick box A3 – although your company name will end in CIC, Community interest Company or C.I.C. this does not mean that your company is exempt from using the word ‘limited’.

The Memorandum of Association

This is required for ‘Paper’ applications only

Do

  • make sure you use the correct memorandum of association for the type of company you have chosen i.e. limited by guarantee or limited by shares

  • make sure all the directors named in the form IN01 have signed and dated the document

Don’t

  • Use separate forms for each person’s signature, all signatures must be on one Memorandum

PAPER AND ONLINE APPLICATIONS

The form CIC36

This is required for both the ‘Online’ and ‘Paper’ applications

Most important tip of all is to not forget your community Interest Statement (CIC36 form) and remember to keep the name consistent with the other documents.

Do

  • make sure you complete each section of the form – A, B, C and D

  • give a clear description of the community of benefit – A

  • give a clear description of the CICs activities and how these will benefit the community – B

  • complete the ‘surplus statement’ on the end of section B

  • read section C – these are the declarations which are mandatory. You sign section D to confirm your understanding

  • make sure that the number of directors that have signed section D are the same number of directors named in the form IN01

Don’t

  • apply to be a CIC if your main activity will be lobbying or campaigning for or against any local or national political party or government decision

  • state in the surplus statement that the CIC will pay dividends to shareholders if the CIC will be limited by guarantee or limited by shares Schedule 2

The Articles of Association

These are required for both the ‘Online’ and ‘Paper’ applications

Do

  • make sure the asset locked body clauses are numbered correctly and correspond with the conditions.

  • choose a registered charity, another CIC or a Registered Society as your nominated asset locked body in clause 3.5

  • choose the correct limited by shares model – Schedule 2 to pay dividends to asset locked bodies or Schedule 3 – to pay dividends to shareholders

  • choose the correct Articles of Association for the type of company you have chosen i.e. limited by guarantee or limited by shares

  • complete the objects clause – the Regulator considers it to be good practice for the CIC to complete the objects clause in the articles and some funding bodies refer to this information when considering an application – however it is not mandatory

Don’t

  • nominate your CIC or a director of your CIC as the asset locked body in clause 3.5

  • remove or alter any of the statutory clauses shown in red in our models

  • make any additional clauses that will negate the meaning of the statutory clauses

Need further help

Do

  • email or telephone the CIC office if you have any questions on the CIC36 form or Articles of Association

  • email or telephone Companies House if your questions relate to the IN01 or Memorandum

Don’t

  • Contact the CIC office regarding the IN01 form – call Companies House!
  • Contact the CIC office regarding any issues regarding the online portal – call Companies House

Do let us know what you think

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