CIC Articles of Association UK: Community Interest Company Template

A community interest company is an ordinary limited company with three extra layers: it must pass the community interest test, it is bound by a permanent asset lock, and its directors file a community interest company report every year with the accounts. Section 26 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 created the form and makes clear that a CIC is never a charity: no Gift Aid, no charity rate relief, and tax like any other company. Groups that want charitable status usually look at a charitable incorporated organisation constitution instead.

The articles are where the CIC status lives. Section 32 of the 2004 Act requires them to state that the company is to be a community interest company and to contain every provision the Regulations prescribe; anything inconsistent with those provisions simply has no effect. Beyond that core, CIC articles of association work like those of any private company under the Companies Act 2006: they bind the company and its members and can be changed by special resolution. The difference is that the asset lock can never be removed, and a new statement of objects needs the Regulator's approval. Our UK nonprofit and community templates cover the documents that usually follow incorporation.

The statutory base is Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004. Under section 33, the name must end with "community interest company" or "c.i.c.", and a Welsh company may use "cwmni buddiant cymunedol" or "c.b.c."; in practice the Regulator also accepts "CIC". Under section 36, the application must be accompanied by a community interest statement signed by each first director and a declaration that the company will not be an excluded company, which together form the CIC36. The Regulator decides eligibility under section 36A.

Detailed rules sit in the Community Interest Company Regulations 2005. Regulation 7 requires a company limited by guarantee to include the provisions of Schedule 1, while regulation 8 gives a company limited by shares the choice between Schedule 2, where only asset-locked bodies can receive dividends, and Schedule 3, which allows dividends to private investors. Paragraph 1 of each schedule is the asset lock: no transfer of assets other than for full consideration, unless the transfer goes to a specified asset-locked body, to another one with the Regulator's consent, or is made for the benefit of the community. The full text is on the official legislation.gov.uk page for the Community Interest Company Regulations 2005.

Dividends follow their own rules. Under regulation 17, a dividend needs an ordinary or special resolution of the members, and the total declared for a financial year cannot exceed the maximum aggregate dividend, which regulation 22 currently sets at 35% of distributable profits. Interim dividends decided by the directors alone are not permitted, because regulation 10 forbids articles that let a dividend be declared without a members' resolution. On a winding up, regulation 23 caps what shareholders receive at the paid up value of their shares.

The most common trigger is a new incorporation. Online, Companies House asks for two uploads, the articles and the CIC36; on paper, the articles travel with the IN01, the memorandum and the CIC36, and every name must match. A community group that has outgrown its unincorporated association or a social enterprise café bidding for council contracts typically lands here, because funders want limited liability with a visible public benefit lock.

An existing CIC with outdated articles is the second scenario. Many still rely on Table A or on objects written into an old memorandum. Replacing them takes a special resolution, and the amended articles must be sent to Companies House within 15 days under section 26 of the Companies Act 2006. A change to the objects goes further: it has no effect until the Regulator approves it, under regulation 13.

Conversion is the edge case that catches people out. An ordinary company becoming a CIC passes the special resolutions of section 37 of the 2004 Act, which adopt the new articles and change the name, and sends them with form CIC37 rather than filing them separately. Members or shareholders holding 15% who did not vote in favour can apply to court within 28 days (section 37A), and the new articles only take effect when the new certificate of incorporation is issued (section 38A). A charitable company needs the Charity Commission's written consent first.

The template builds complete CIC articles of association and excludes the model articles expressly. Four parts deserve a closer look:

• Article 3 reproduces the statutory asset lock in the prescribed wording of the schedule that matches your company type, since the Regulator turns away articles that alter or negate those clauses.
• Choosing to name an asset-locked body (another CIC, a charity or a permitted registered society) lets the company transfer assets to it without asking the Regulator, and directs the residual assets there on a winding up. Leaving the question open is possible, but every such transfer then needs consent.
• Where the company has shares, the dividend article follows the schedule you choose: under Schedule 3 the aggregate dividend cap applies, exempt dividends are defined, and interim dividends need an ordinary resolution.
• Directors' meetings come with a quorum you set, an optional casting vote for the chair, declarations of interest under sections 177 and 182 of the Companies Act 2006 and the identity verification rule of section 167M.

Membership has its own options. With the small membership model, every member must be a director, which suits a founding team; for a share company the template then obliges a departing director to transfer their shares to the remaining directors, at a fair value certified by an independent accountant if no price is agreed. The wider model admits users, volunteers or residents, with removal only after a hearing. General meetings run on fourteen clear days' notice and minutes are kept for ten years. Investor CICs usually pair the articles with a shareholders' agreement for UK companies covering exit and information rights.

You start with the name of the CIC, typed exactly as it will appear on the CIC36. The next question fixes the type: guarantee, shares under Schedule 3 or shares under Schedule 2, with the amount each member guarantees for a guarantee company. From there you choose the membership model and write the community purpose, starting with a verb because the sentence follows "in particular (without limitation) to".

The asset-locked body screen asks for its name and registration number. You then set the minimum number of directors and the board quorum, and decide whether the chair keeps a casting vote. The last questions cover adoption: a new CIC lists up to five subscribers, who sign the subscriber block, while an existing company records the date of its special resolution and the director or secretary who certifies the copy.

Every answer updates the preview before you download the articles in Word or PDF. If you file on paper, the memorandum of association template and the Companies House IN01 application template complete the bundle; the CIC36 itself comes from the Regulator's page on gov.uk.

A common reason for rejection is an asset-locked body that cannot hold the role. A CIC cannot name itself, one of its directors or an ordinary company. Close behind comes the edited statutory clause: founders rewrite the asset lock in plainer English, or add a sentence that lets directors "release" assets, and the application stalls. Leave the prescribed wording alone and put your own rules elsewhere in the articles.

Objects that benefit only the members or the staff fail the community interest test, and so does a company whose main activity is political campaigning; incidental campaigning is tolerated, a campaigning organisation is not. The type of company is another trap. A company limited by guarantee can never later issue shares to investors, so a social enterprise that expects to raise equity should start with shares under Schedule 3. Promising dividends to shareholders in the CIC36 surplus statement with guarantee or Schedule 2 articles is a contradiction the Regulator spots. Last, directors forget that the community interest company report must go to Companies House every year with the accounts, dormant years included.