Legal structures for businesses - an overview

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

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

See 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