Company and community

7Quicker to set up

A community interest company is quicker to form than a charity, with a single consolidated application to form the company made to Companies House, which they and the CIC Regulator separately review. By contrast, in a charitable company, the incorporation of the company must be undertaken with Companies House and then a further application is made to the Charity Commission to register as a charity, which itself can take weeks or indeed months.

8Reduced governance requirements

There is also a lower level of ongoing governance for a community interest company than a charity. While CICs are regulated by the CIC Regulator, this is comparatively ‘light touch’, with the main requirement being the submission of the annual Community Interest Report. Charities, by contrast, are more strictly regulated by the Charity Commission (in England and Wales) or the Office of the Scottish Charity Regulator (in Scotland). The reporting requirements, in financial and other areas, are more stringent for charities than CICs.

This relative freedom from regulatory restraints means that a CIC can focus intensively on its social aims, with fewer restrictions on trading activities than a charity faces meaning they can also take a more commercial approach to achieving their ends.