Straight answer
How to set up a CIC in 2026: a step-by-step guide
How do you set up a community interest company (CIC)?
To set up a CIC, register a limited company with Companies House and file form CIC36, your community interest statement, with CIC-compliant articles that include an asset lock. The CIC Regulator must agree you pass the community interest test before incorporation. Decide early between limited by shares, which can pay capped dividends, and limited by guarantee.
Last reviewed 11 September 2026. Written by Steph Hamill, HAM Agency.
Six steps
| Step | What you do | Watch for |
|---|---|---|
| 1. Define the community | Name who benefits: a place, a group with a shared need, or a cause | A group a reasonable person would not see as a section of the community, such as your friends or regular drinkers of one beer, will not pass |
| 2. Choose the structure | Limited by shares, which can pay capped dividends to investors, or limited by guarantee, which cannot | This decides whether you can raise equity later |
| 3. Draft the articles | CIC-compliant articles with the asset lock. The Regulator publishes free model articles | A CIC cannot rely on the default Companies Act articles |
| 4. File | Memorandum, articles, form IN01 and form CIC36, the community interest statement, with the fee | CIC36 must say what you will do, who it helps and how |
| 5. Wait for the Regulator | The Regulator decides whether you pass the community interest test; only then does Companies House incorporate | No same-day service |
| 6. Run it properly | Accounts plus the annual CIC report (form CIC34), confirmation statement, director identity verification | The CIC report is public and the Regulator reads it |
Companies House and the Regulator both charge fees. Check the current amounts on the Companies House fees page before you file.
The community interest test
A company passes if a reasonable person might consider its activities are carried on for the benefit of the community. Two things will stop you:
- Political campaigning, or activity meant to support it
- Activity that benefits only the members of a body or the employees of one employer, with no wider community benefit
Paying staff and, for share companies, paying capped dividends is fine. Everything the CIC does should contribute to its community purpose, directly or through the profits it makes.
The asset lock
The asset lock keeps a CIC's assets and profits working for the community. Assets can leave only at full market value, to another asset-locked body named in your articles or approved by the Regulator, or otherwise for the benefit of the community. The Regulator warns that it has permanent, long-term consequences. Decide now which charity or CIC should receive your assets if you ever close.
The caps
| Cap | Limit |
|---|---|
| Dividend per share, for shares issued on or after 6 April 2010 | 20% of the paid-up value of the share |
| Total dividends in a year | 35% of distributable profits |
| Performance-related interest, agreements from 6 April 2010 | 10% of the average debt outstanding over the previous 12 months |
CIC or charity
| CIC | Charity | |
|---|---|---|
| Purpose | Any lawful purpose carried on for community benefit | Exclusively charitable purposes |
| Tax | No special reliefs; no Gift Aid | Charitable tax advantages |
| Paying the founder | Directors can be paid | Trustees can be paid only if the constitution allows it and it is in the charity's interests |
| Raising money | Grants, loans, trading; share CICs can take capped equity | Grants, donations, trading, Gift Aid |
| Regulator | CIC Regulator, light touch | Charity Commission, more demanding |
| Registration | Companies House | Charity Commission if income is over £5,000 a year; CIOs register whatever their income |
Before you file
- Community defined in one sentence
- Shares or guarantee decided, with a view on future funding
- Articles drafted from the Regulator's model, with the asset lock
- Asset-locked body chosen to receive assets on closure
- CIC36 drafted: activities, who benefits, how
- Directors ready to verify their identity with Companies House
- A plan for the first annual CIC report: what you will measure from day one
How HAM helps
HAM sets up CICs and builds the grant and income engine that keeps them going through Capital. Take the discovery quiz to see where to start.
Questions
Can a CIC be a charity?
No. CIC legislation excludes a company from being both. A CIC can have wholly charitable purposes but would not get charitable status. A CIC can pass assets to a charity, and a charity can own a CIC.
Can a CIC pay its directors?
Yes, as long as pay is not disproportionate to the work. This is one reason founders who want to be paid and keep strategic control choose a CIC over a charity.
What is the dividend cap?
For shares issued since 6 April 2010, the dividend on a share cannot exceed 20% of its paid-up value, and total dividends in a year cannot exceed 35% of distributable profits.
Do CICs get tax breaks?
Not because of their legal form. A CIC pays corporation tax like any company and cannot claim Gift Aid. Charities have tax advantages CICs do not.
How long does it take?
The Regulator must decide you are eligible before Companies House can incorporate you, so the same-day registration service is not available for CICs.
Sources
- Office of the Regulator of Community Interest Companies: Information pack (March 2026)
- GOV.UK: Community interest companies, guidance chapters
- GOV.UK: Companies House fees
- Charity Commission: How to register your charity (CC21b)
- Charity Commission: Charity types, how to choose a structure (CC22a)
- GOV.UK: Verifying your identity for Companies House