Legal structures for businesses - an overview

Setting up specific types of limited company

Instead of setting up a 'standard' type of public or private company, you could consider setting up a:

  • Community Interest Company
  • Right-to-manage company
  • Societas Europaea or European company

These types of company are subject to company law in the same way as standard public or private companies - see starting a private company and starting a public limited company.

However, they must meet additional criteria in order to qualify as the company type concerned.

Community Interest Company (CIC)

A CIC is a type of limited company designed for people who want to run a business for the benefit of the community - ie not purely for the benefit of the company's members and shareholders.

A CIC may be a public or private company limited by:

  • share capital
  • guarantee with or without share capital

A company cannot become a CIC if it is:

  • a charity
  • intends to be a political party, a political campaigning organisation, or a subsidiary of either

If you intend to set up a CIC, you must register it with Companies House.

CICs are often seen as a type of social enterprise and may take the form of:

  • leisure centres
  • housing associations
  • worker-owned co-operatives
  • community development trusts

SeeĀ choose the right structure for your social enterprise.

Right-to-manage (RTM) company

A RTM company is run by leaseholders who have taken on the landlord's management functions, eg repairs and maintenance of the premises.

For a company to be a RTM company in relation to those premises:

  • it must be a private company limited by guarantee
  • its articles of association must state that its object, or one of its objects, is gaining the right to manage those premises

Societas Europaea (SE)

An SE is a trans-European company that may be created on registration in any European Economic Area state.

If you wish to create an SE in the UK, you must register it with Companies House.

An SE can be formed:

  • by merger
  • as a subsidiary
  • as a holding company
  • by a PLC transforming itself into an SE

If registered in the UK, an SE:

  • is a public limited company (PLC) formed in accordance with the Companies Act 2006 and related legislation
  • must have both its registered office and head office in the UK - although they don't have to be at the same address

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