Start with the organisation

What Are You Actually Trying to Establish?

A Community Interest Company begins with the organisation you are trying to establish.

Before considering the company's articles, registration process or governance arrangements, it is useful to understand what the organisation is actually intended to become.

What will the organisation exist to achieve? Who or what community is it intended to benefit? What will it actually do? Who is expected to govern it? What circumstances will shape the way it operates?

You may already have a proposed name. You may already know who you expect to become directors or members. You may already have decided that a CIC limited by guarantee is the route you want to pursue.

You do not need to begin by translating those practical ideas into company-law or CIC terminology.

The starting point is the organisation itself: its purpose, community, activities, people and intended operation.

Those ordinary facts provide the foundation for understanding a CIC limited-by-guarantee formation service and for deciding what information needs to be prepared before registration.

Understand the community purpose

What Community Purpose Is the Organisation Intended to Pursue?

A CIC is established around a community purpose.

That purpose should therefore be understood in practical terms before the formal CIC requirements are addressed.

Tell us what the organisation is intended to achieve for a community, group of people or wider public interest.

You might want to provide services to a particular community, create opportunities for people who experience disadvantage, improve access to facilities or activities, support local development, provide education or training, protect something of community value, or pursue another practical objective intended to benefit a community.

You may already understand the people or community you want to help without knowing how that purpose should be expressed for establishing a CIC.

That is not a problem.

The important information at this stage is the reality behind the proposed organisation: who it is intended to benefit, what benefit is contemplated and why the organisation is being established.

That information can then be considered as part of the professional preparation of the CIC establishment requirements.

You provide the underlying facts and intended outcome. Coddan's role is to translate those facts into the appropriate preparation within the CIC limited-by-guarantee service.

From purpose to activity

What Will the Organisation Actually Do?

A community purpose becomes meaningful through what the organisation actually does.

Explain the activities you expect the CIC to carry out.

This might involve providing services, delivering projects, organising activities, operating a facility, providing education or training, supporting a particular community, creating employment or opportunities, managing assets, supplying goods or services, or carrying out another form of activity intended to achieve the organisation's purpose.

Practical language is useful at this stage.

You do not need to turn your description into articles or formal CIC terminology.

For example, saying that the organisation will provide training to a particular group, operate a community facility or deliver a service to local residents may provide more useful starting information than attempting to draft constitutional wording before the organisation itself has been understood.

The purpose explains what the organisation is intended to achieve. The activities explain how it intends to pursue that objective.

Both matter when preparing the CIC's corporate and regulatory framework.

Coddan can work from the practical information you provide rather than requiring you to diagnose the formal requirements yourself.

Confirm the requested service fit

Does the CIC Limited-by-Guarantee Service Fit Your Circumstances?

If you are considering establishing the organisation as a Community Interest Company limited by guarantee, the next question is whether the requested Coddan service fits the circumstances you have described. This is particularly relevant if you are looking for a CIC limited-by-guarantee formation service that combines formation preparation with appropriate corporate support.

This is a service-fit question rather than a general legal-form selection exercise. For organisations already committed to the CIC limited by guarantee route, the service is designed as a professional community interest company setup bureau: practical preparation and filing support around the structure the customer has chosen, rather than a substitute for the customer's own decisions.

Coddan can explain the CIC limited-by-guarantee establishment route as a specialist UK bureau for setting up social enterprise guarantee companies, guide you through the information and preparation required for that route, and consider whether the circumstances presented fit the service being provided.

The professional role is to work within the CIC limited by guarantee route you have requested, while identifying circumstances that may need separate consideration.

Coddan does not use this page to advise you whether you should establish:

• a Community Interest Company;
• an ordinary company limited by guarantee; or
• a charitable company.

If you are already pursuing a CIC limited by guarantee, Coddan can work within that requested route and establish what needs to be done to implement it appropriately.

If your circumstances reveal a matter that falls outside the Page 12 service, that should be identified rather than forcing the circumstances into an unsuitable formation process.

The purpose of this stage is therefore straightforward: to establish whether the requested CIC limited-by-guarantee service fits the organisation you are asking Coddan to establish.

Understand the corporate instrument

What Does a CIC Limited by Guarantee Mean for the Organisation?

Once the organisation and the requested service have been understood, the CIC limited-by-guarantee structure can be considered as the corporate instrument through which the organisation will be established.

A company limited by guarantee does not have share capital. Instead, its members undertake a specified guarantee in accordance with the company's constitutional framework.

For a CIC limited by guarantee, that corporate structure operates within the additional framework applicable to Community Interest Companies.

The distinction matters because the company is not being established merely as an ordinary company with a community-related description attached to it. The CIC's community-interest requirements form part of the establishment process.

The important point is that the corporate structure should support the organisation you have described.

You do not need to begin by designing the company's guarantee provisions, membership machinery or constitutional clauses yourself. Those matters can be addressed as part of the formation process.

CIC limited by shares is a separate corporate form. Coddan can provide formation services for that structure separately, but it is not the subject of this page and does not form part of this customer journey.

The focus here remains the establishment of the CIC limited by guarantee.

Establish the community-interest framework

How Does the Community Purpose Become Part of the CIC?

Establishing a CIC involves more than registering an ordinary company.

The organisation's community purpose and proposed activities need to be reflected appropriately within the CIC establishment framework.

A CIC must satisfy the applicable community interest test. In practical terms, the test asks whether a reasonable person might consider that the company's activities are or will be carried on for the benefit of the community.

The information you provide about the organisation, its community purpose and what it intends to do provides the practical foundation for this work. For founders comparing a CIC formation route that reflects the community-interest requirements with other social-enterprise structures, the key issue is still whether the proposed purpose and activities satisfy the CIC framework. Where required for the registration route, that information also feeds into the CIC36 community interest statement preparation and filing service: Coddan can prepare the relevant material from the facts you provide, while the organisation remains responsible for the substance of its stated purpose and activities.

You do not need to diagnose the statutory test yourself. Your role is to explain what the organisation will do, who it is intended to benefit and how that benefit is expected to arise.

The CIC process then requires that information to be presented in the appropriate documentation and application.

This is where professional preparation becomes important.

You should be able to explain what the organisation is trying to achieve without having to work out the regulatory wording or construct the application yourself.

Coddan can use that explanation as the starting point for preparing the relevant CIC formation work within the agreed service.

The objective is not simply to complete forms.

The aim is to make sure that the corporate and CIC-specific formation material reflects the organisation you are actually creating.

Establish the governing people

Who Will Be Responsible for Running and Governing the CIC?

A CIC needs people who will take responsibility for its corporate governance and operation.

Explain who you expect to be involved in running the organisation.

You may already have a group of people who intend to establish the CIC together. You may have individuals with particular experience, knowledge or connections to the community. You may still be finalising who will take on the relevant roles.

At this stage, what matters is who these people are and how you expect responsibility to be shared.

The relevant corporate requirements can then be considered in the context of the CIC limited-by-guarantee structure.

This may include the information required about directors and the way their responsibilities and relationships with the company are reflected in the corporate framework.

You do not need to design the company's governance arrangements before you can explain who you want involved.

You provide the factual information. Coddan then prepares the relevant corporate material within the agreed service.

Understand membership and participation

Who Should Participate as Members and Guarantors?

The members of a CIC limited by guarantee are not shareholders. Instead, they are members who undertake to contribute a specified amount to the company's assets if the company cannot pay its debts, including in the circumstances of a winding up. The important question is therefore not simply how many guarantors there will be, but how membership is intended to work within the organisation.

The intended relationship between the directors and members can also matter. For example, the CIC Regulator's current model constitutions distinguish between a small-membership CIC in which all directors are also members and all members are also directors, and a large-membership CIC in which the company has more members than directors. Those different relationships are reflected in the available constitutional frameworks.

You therefore need to explain the practical reality in ordinary terms: who is intended to participate, whether the directors are also intended to be members, whether there will be additional members, and how membership is intended to relate to the people running the organisation.

You do not need to diagnose the constitutional model yourself.

Coddan's professional role is to translate the intended participation arrangements into the appropriate membership, guarantee and constitutional framework for the CIC limited by guarantee.

Bring participation into governance

How Is the Organisation Intended to Be Governed?

Once the intended membership and guarantee relationships are understood, the next question is how those relationships should operate in practice.

Governance should reflect the organisation that is actually being established. That means considering how the directors will run the CIC, what role the members are intended to have, how important decisions are to be made, and how the relationship between directors and members should work within the organisation.

The aim is not to add governance for its own sake. It is to create arrangements that make sense for how the organisation is intended to operate.

The relationship between directors and members matters here too. The people involved and the way membership is intended to work help shape the company's decision-making and governance arrangements.

Coddan's role is to bring those facts together and prepare the appropriate governance framework, rather than expecting you to design the corporate machinery yourself.

Construct the governing framework

What Should the CIC's Articles Achieve?

The articles of association provide the CIC's governing corporate framework. They establish how the company is to operate internally, including matters concerning its members, directors and decision-making.

For a CIC limited by guarantee, the constitutional framework must also reflect the requirements that apply specifically to CICs. This includes the statutory asset-lock provisions governing the use and transfer of the CIC's assets. Current CIC Regulator guidance confirms that the applicable CIC articles must contain the relevant asset-lock provisions alongside provisions concerning membership, voting rights and directors.

You do not need to draft or interpret the asset-lock provisions yourself.

The professional task is to ensure that the constitutional framework properly reflects the organisation, its membership and governance arrangements and the requirements applicable to the CIC limited-by-guarantee structure. In practical terms, this means preparing articles of association prepared for the proposed CIC and applicable requirements for the proposed CIC, including the compulsory asset-lock framework. It is more accurate to describe this as a CIC articles and constitutional preparation service than as an assurance of regulatory approval. Where tailored drafting is needed, this is the practical meaning of articles of association prepared for the proposed CIC and applicable requirements drafting for the proposed CIC.

Standard treatment should remain standard where it genuinely fits. Particular circumstances should receive particular treatment where justified.

Understand the governance-support function

Do You Need a Company Secretary — and What Does Secretarial Support Actually Do?

There are three different concepts that are often treated as though they were the same:

A CIC limited by guarantee is a private company. A private company is not generally required to have a company secretary unless its articles of association require one. This is the statutory baseline under section 270 of the Companies Act 2006 and current Companies House guidance.

That means the existence of a professional company-secretarial service does not mean that every CIC limited by guarantee must appoint a company secretary.

The more useful question is what your organisation actually needs.

Where a company secretary is appropriate, the statutory appointment is one matter. The professional work undertaken by a company secretary or external secretarial provider is another. Broader governance support may extend further again, depending on the organisation's continuing needs. Companies House describes functions that a company secretary might ordinarily perform, including maintaining statutory registers, assisting with filings, handling meeting notices and maintaining records of resolutions and meetings.

Coddan can therefore support the company-secretarial and governance function where that support is appropriate, without presenting appointment of a company secretary as an automatic requirement.

Identify what needs particular attention

Is There Anything About Your Organisation That Changes the Ordinary Establishment Route?

Many CICs can be established through a relatively straightforward corporate framework.

Others contain circumstances that deserve closer attention before the establishment process is completed.

This might arise where:

• the organisation has unusual or complex activities;
• the proposed membership or governance relationships are unusual;
• the CIC is connected with an existing organisation;
• assets or property create additional considerations;
• particular constitutional arrangements are contemplated;
• people involved are located in different jurisdictions;
• the organisation has circumstances that do not fit neatly within an ordinary description; or
• another material feature could affect how the CIC should be established.

An unusual circumstance does not automatically mean that you need an elaborate structure.

It also does not mean that every available Coddan service will be relevant.

The practical aim is to identify whether anything material needs different treatment before the CIC is formed.

If the ordinary framework fits, there is no reason to make the formation more complicated.

If something does need particular attention, it is better to identify it before formation than after the company has been established.

Bring the organisation together

How Do All These Facts Become One Coherent CIC?

By this point, the organisation should be understood as a whole.

At this point, the information should start to make sense as one organisation rather than as a collection of separate answers.

It is the combined picture of:

• what the organisation is intended to achieve;
• which community it is intended to benefit;
• what activities it will undertake;
• whether the requested CIC limited-by-guarantee service fits the circumstances;
• how the CIC corporate structure applies;
• how the community-interest requirements are addressed;
• who will govern the CIC;
• who will participate as members and guarantors;
• how the organisation is intended to be governed;
• what its articles need to achieve;
• whether a company-secretarial or broader governance-support function is appropriate; and
• whether anything unusual requires particular attention.

This is where the separate pieces of information need to come together.

You provide the facts about the organisation and what you want it to achieve.

Coddan considers those facts together and uses them to prepare the appropriate CIC limited-by-guarantee formation route within the agreed service.

The result should be coherent.

The corporate structure should reflect the organisation.

The governing framework should support its intended operation.

The CIC-specific requirements should correspond with the organisation that is actually being established.

And the formation process should follow from that professional understanding rather than preceding it.

The objective is therefore not simply to obtain a Companies House number.

It is to bring the proposed organisation together sufficiently for it to be established as the CIC limited by guarantee that you have asked Coddan to establish.

Understand the professional work behind the formation

What Are You Actually Paying Coddan to Do for Your CIC limited by guarantee?

A professional CIC limited by guarantee formation service sits between the information you provide about the organisation and the formal registration process. You supply the underlying facts and decisions: what the organisation is for, the community it intends to benefit, what it will do, who will govern it, who will be its members or guarantors and the other information needed for the formation. Coddan can then review that information, identify points that need clarification and prepare the agreed formation work within the scope of the service you select.

The same professional approach can be used where an existing CIC limited by guarantee needs a defined secretarial or corporate-administration task after formation. You do not have to have incorporated the CIC through Coddan to instruct us, and a single agreed task does not automatically require an annual secretarial package or appointment of Coddan as company secretary.

Where the work is outside the immediate formation scope, Coddan can confirm the proposed work and responsibilities in a written service scope before the task proceeds.

That is the practical value of a CIC limited-by-guarantee formation service. The aim is not simply to complete an online form. It is to bring the company's ordinary formation requirements and the CIC-specific requirements together in a coherent registration route, while keeping your responsibilities and the external authorities' responsibilities clear.

Create the corporate record

What Do You Have When the CIC Has Actually Been Established?

The establishment of a CIC is more than a registration event recorded on a screen.

Once the company has been established, there is a corporate record supporting its identity, constitutional framework and governance.

The appropriate corporate and governance documentation can form part of that record.

Coddan can prepare corporate documents in digital format, providing practical access to the documentation required for the organisation's continuing corporate life.

Where appropriate to the service and circumstances, corporate documents can also be professionally prepared in printed format.

These materials provide a tangible record of the organisation that has been established and can support its subsequent governance and administration.

The exact documents required or available depend on the circumstances and agreed service.

The important point is that documentation should support the organisation rather than become a catalogue of unnecessary extras.

The registration event establishes the corporate entity. The accompanying corporate record helps the organisation understand and administer what has been established.

Return to the organisation

What Happens After the CIC Exists?

Once the CIC has been established, the organisation can begin its corporate life.

The outcome is not simply:

"Here is your company number."

The outcome is an incorporated community-purpose organisation with the corporate and governance framework through which it can begin pursuing the purpose for which it was established.

The immediate position will depend on the organisation's circumstances.

There may be governance arrangements to put into operation, corporate records to maintain, responsibilities to administer or other matters arising from the company's particular activities and structure.

Those matters should be considered in proportion to what the organisation actually requires.

Some CICs may need continuing professional assistance with corporate administration or governance.

Others may be capable of managing their continuing responsibilities without additional support.

The important point is that establishment should return to the destination with which the process began:

organisation intended → organisation understood → CIC limited by guarantee framework determined → organisation established → organisation begins its organisational life.

Consider what genuinely comes next

What Does the CIC Need After Establishment?

Once the CIC has been established, it begins its continuing corporate and organisational life.

Depending on the organisation, this may involve ongoing company-secretarial or governance support, Companies House responsibilities, the annual CIC report and accounts, other CIC-specific reporting requirements, accounting matters or tax matters arising from the CIC's actual activities.

These matters should be considered from the organisation's circumstances rather than assumed automatically. Where continuing support is wanted, outsourced company-secretarial support for UK CICs can cover practical work such as statutory register maintenance, corporate-document updates and governance administration within the agreed scope.

A separate tax boundary

A CIC is a company and is not a charity merely because it has CIC status. CIC status does not itself create the tax treatment available to a recognised charity. HMRC confirms that a CIC is liable to Corporation Tax as a company and that there are no CIC-specific Corporation Tax exemptions or reliefs.

The important boundary is therefore:

Corporation Tax, VAT and other tax questions depend on the CIC's actual activities and circumstances. They are separate professional matters where relevant and should not be treated as automatically resolved by the formation of the CIC.

This page does not assess the CIC's tax position during formation. Where a separate tax or accounting question arises, it should be considered on its own professional basis.

The same proportionality applies to continuing governance and secretarial support. Some CICs may genuinely require continuing assistance; others may be able to operate their governance arrangements without additional professional support at that stage.

For professional partners

CIC Formation and Secretarial Support for Professional Partners

Accountants, formation agents and other corporate-service professionals can instruct Coddan where a client needs defined CIC formation, corporate-document or secretarial work. The instruction should identify the company, the authority under which the work is requested, the information available, the required customer approvals and the intended outcome.

Professional partners can discuss a defined filing, verification or corporate-services requirement through the published CLG filing and verification project enquiry route where relevant.

Frequently Asked Questions About CIC Limited-by-Guarantee Formation