Accounting for Community Interest Companies

A Community Interest Company is a clever piece of legal design: a genuine trading company — invoices, payroll, Corporation Tax and all — that is legally bound to exist for the benefit of a community rather than its owners. That double nature is exactly why its accounting deserves specialist attention. A CIC has every obligation an ordinary company has, plus a layer of its own, and bookkeeping that ignores the second layer stores up trouble with the regulator and with funders.

What makes a CIC different in practice

The CIC34 report. Every year, alongside its accounts, a CIC must file a community interest company report — the CIC34 — describing what the company actually did for its community, how it involved stakeholders, and what directors were paid. It is not a formality to be reverse-engineered each spring: a good CIC34 is written from records that captured community-relevant activity as it happened.

The asset lock. A CIC's assets are locked to its purpose. They cannot be sold off cheap or distributed to members beyond strict limits; on dissolution, remaining assets pass to another asset-locked body. Day to day, that means transactions with directors and connected parties need documenting with unusual care — arm's length, at market value, and visibly so in the books.

Dividend and interest caps. CICs limited by shares can pay dividends, but only within caps set under the CIC regime; performance-related interest on borrowing is capped too. If your CIC is limited by guarantee — most are — dividends are off the table entirely, and the books need to demonstrate that surpluses stayed with the mission.

The regulator. The Office of the Regulator of Community Interest Companies oversees all of this with real powers. It is a light-touch regulator for CICs whose paperwork holds together — which is rather the point of getting the paperwork right.

Funder expectations. Most CICs live on a blend of grants, contracts and trading income. Funders increasingly expect to see their money tracked distinctly — what came in, what it was spent on, what remains — which ordinary company bookkeeping simply does not do by default.

How we handle CIC books

Every transaction in a CIC's ledger passes through the same discipline we apply everywhere: AI drafts. AgentLedger validates. People approve. For a CIC, the human layer earns its keep on the CIC-specific judgements — how grant income is tracked against its purpose, how director transactions are evidenced, how the year's activity is recorded so the CIC34 can be written from the ledger rather than from memory.

Because of that extra layer, CICs are not covered by our standard price for ordinary private limited companies. We quote each CIC individually, based on its funding mix, transaction volume and reporting needs — and we put the quote in writing before you commit to anything.

What happens when you ask for details

1. You tell us about the organisation. Limited by guarantee or by shares, roughly what income and from where, what reporting your funders expect. Plain questions, no documents yet.
2. We confirm scope and price. In writing: exactly what we would handle — bookkeeping, records for the CIC34, funder-ready reporting — and the exact price for it.
3. You decide. No payment is taken at this stage, and an enquiry is not an acceptance by either side.

Ask for Details