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Limited Companies

Useful advice, tips and business news.

July 30, 2020
May 7, 2024

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Companies House Company Registration Number (CRN) Explained

Key insights on Company Registration Number (CRN) and how Companies House uses it to trace company information of incorporated businesses in the UK.

🔑 Key Highlights

  • A company registration number is a unique alphanumeric code provided by Companies House upon registration for used to identify businesses incorporated in the UK.
  • It is also called the ‘Company Number,’ especially on the certificate of incorporation or ‘Companies House Registration Number.
  • Sole traders and general partnerships, not registered at Companies House, do not have a CRN. However, limited companies, including LTDs, limited liability partnerships (LLPs), and limited partnerships (LPs), have one.
  • A company registration number remains the same for the entire lifetime of the company.

What Is a Company Registration Number (CRN)

A company registration number comprises 8 numbers or 2 letters followed by 6 digits. It is issued by Companies House to identify limited companies in the UK. 

Sometimes, it may also be referred to as a company number, Companies House number, incorporation number, or business registration number. 

What Is the Format of a Company Registration Number

A CRN can take several forms depending on the jurisdiction of your company formation or the type of company you incorporate. See the table below for details.

Jurisdiction of incorporation

Company Type

Description

Example

England and Wales

Limited Company

An eight - digits that start with 0 or 1

01234567

LLP

Alphanumeric comprises a two-letter “OC” prefix followed by six numbers.

OC121212

LP

Alphanumeric comprises a two-letter “LP” prefix followed by six numbers.

LP222222

Northern Ireland

Older (pre-partition) companies

Alphanumeric comprises a two-letter “NI” prefix followed by six numbers

NI1212121

Limited company (post-partition)

Alphanumeric comprises a two-letter “OR” prefix followed by six numbers.

R0333333

LLP

Alphanumeric comprises a two-letter “NC” prefix followed by six numbers.

*NC123456

LP

Alphanumeric comprises a two-letter “NL” prefix followed by six numbers.

NL444444

Scotland

Limited Company

Alphanumeric comprises a two-letter “SC” prefix followed by six numbers.

SC555555

LLP

Alphanumeric comprises a two-letter “SO” prefix followed by six numbers.

SO888888

LP

Alphanumeric comprises a two-letter “SL” prefix followed by six numbers.

SL111111

Table notes: *While the Northern Ireland Limited Liability Partnerships prefix is NILLP, when a user signs into webfiling, only the prefix NC, not NILLP, is required and displayed. Some older Northern Irish companies have CRNs with the letter ‘R’ followed by 7 digits, but these numbers are no longer issued.

How to Find Your Company Registration Number?

One of the main places to find the number is on your incorporation certificate from Companies House.

Other places you can locate your CRN number include —

  • Official correspondence with Companies House or HMRC.
  • Visit Companies House - GOV.UK register and search for a company by name, the result will show the CRN.
  • If you’ve changed your company name recently, you can locate the CRN in the change of company name certificate.
  • Review emails or correspondence from your company formation agent or accountant. They may regularly cite your incorporation number in their communication.
Sample Certificate of Incorporation UK
Sample Certificate of Incorporation UK

Insight

Your company’s Certificate of Incorporation, along with any statutory mail sent by Companies House, will display your company registration number. The company registration number is usually printed alongside or beneath headings such as “Company number.”

To find your company registration number in the public register run a Companies House search free of charge by following the steps below.

  1. Go to https://find-and-update.company-information.service.gov.uk/
  2. Enter the name of your company in the search box
  3. Click the “SEARCH” button
  4. You’ll see your company number just below the company name.

Your CRN Is Different From Other Numbers

Your Company Registration Number (CRN) serves as a unique identifier for your company within government records. However, it's crucial to distinguish it from other numbers used by various agencies. Below is a breakdown to clarify.

🛈 Info

  • Unique Taxpayer Reference (UTR) Number, a 10-digit identifier (e.g. 0123456789), also known as a 'tax number' or 'tax reference,' is issued by HMRC for tax purposes.
  • Value Added Tax (VAT) Number, an alphanumeric with the prefix “GB,” followed by nine numbers (e.g., GB123456789), is issued by HMRC for VAT registration.
  • Employer Registration Number (ERN), an alphanumeric number consists of a three-digit number followed by a forward slash and a mix of letters and numbers (e.g. 123/AB456). It's issued by HMRC when an employer registers for Pay As You Earn (PAYE).
  • Company Authentication Code, a six-digit alphanumeric code issued by Companies House to limited companies. It serves as an electronic signature during digital filings.
  • Companies House Standard Industrial Classification (SIC) code, assigned by Companies House, categorises a company's primary business activity.

How Companies House Uses Your CRN for Webfiling

Companies House requires that you provide your CRN WebFiling to enable them to identify and distinguish your company from the other registered entities. 

The unique number ensures that any filings or submissions you make through WebFiling are associated with the correct company record in the database.

Read also: How to File Company Information Online Using the Companies House Webfiling Service.

At What Point Will You Need a Company Registration Number? 

CRNs are required for any activity that requires signing in to the online filing system and make changes to your company records through either WebFiling or the Companies House account

Such filings and amendments include — 

  • Making your Companies House filings including – 
    • Submitting annual returns
    • Filing your accounts
    • Filing copies of resolutions
  • Amending company information with the registrar such as –
    • Company name change applications
    • Changing your registered office address and Single Alternative Inspection Location (SAIL) address
    • Your Accounting Reference Rate (ARD)
  • Adjusting your company structure, or company officer details which may include — 
    • Adding a new company secretary or secretary
    • Removing an existing company director or secretary
    • Changing the details of directors and secretaries
    • Increasing capital of shares
    • Issuing share certificates.
  • In your tax-related dealings with HMRC in the following cases for example — 
    • Registering for VAT
    • Paying your Corporation Tax, VAT, or income tax. 
    • Filing Company Tax Returns
    • Issuing dividend vouchers
    • Making national insurance contributions through PAYE

You’ll also need your CRN for official purposes such as opening a business bank account, signing contracts on behalf of your company, and applying for funding or tenders. 

Where do I need to display my Company Registration Number?

You are legally expected to display your limited company’s registration number on all your company stationery, including but not limited to —

  • Letterheads
  • Emails
  • Invoices
  • Receipts
  • Online content
  • Order forms

How to Register for a Company Registration Number

Your CRN will be provided by Companies House upon registration. There is no separate registration process to get a company number. As soon as your new limited company or Limited Liability Partnership (LLP) is registered, the number will be referenced in your digital certificate if you registered online or a paper certificate by post if you set up a limited company using a paper application. 

Will I get a new CRN number if I change my business name?

No. Your CRN will not change when you change your business name. 

It remains the same for the life of your company since it's the main way Companies House uses to identify your business regardless of any changes in name, address, directors, shareholders, or business activities.

Instead, you’ll simply receive a ‘certificate of incorporation on change of name’ from Companies House, which will contain the new name, date of change, and the same CRN number. 

Please note that the change of name certificate does not replace the original certificate of incorporation.  

Is a company registration number the same as a tax number?

No. CRNs are issued by Companies House as unique identifiers for individual companies on the register, whereas company tax numbers are unique 10-digit codes that HMRC assigns to companies to track tax records.

Just like with CRN, you do not have to apply for your UTR number, HMRC will automatically give you one as soon as your company is registered with Companies House. 

Do sole traders and ordinary partnerships get company registration numbers?

No. CRNs are only issued to limited companies and LLPs, including companies limited by guarantee because they are incorporated or registered at Companies House and are required to file statutory records.

Five Things to Know About Confirmation Statements
Five Things to Know About Confirmation Statements
December 12, 2016
April 8, 2024

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Understand the Different Types of Companies Limited by Guarantee

Everything you need to know about a standard company limited by guarantee, including a charity company, a CIO, right-to-manage organisations, and property management entities subtypes of CLG.

🔑 Key Takeaways

  • A company limited by guarantee (CLG) is suitable for charities, social enterprises, or membership organisations who wish to enjoy limited liability protection.
  • Like private limited companies, a CLG is a separate legal entity from its owners; however, unlike an LTD, company profits are reinvested to finance the institution's objective, and members are not shareholders but rather guarantors.
  • The business must comply with both the official Registrar of Companies and the Charity Commission UK requirements.

A company limited by guarantee is a type of limited company in the UK registered to advance the objectives of non-profits such as clubs, charities, societies or any other institution seeking to function under the protection of limited liability.

Insight

There are four main types of companies limited by guarantee —

  • Company Limited by Guarantee — Registered only at Companies House for the benefit of the members without seeking charitable status.
  • Company Limited by Guarantee Charity — Has the option to register with both the Registrar and Charity regulator or solely with the Commission. When registered with both, it becomes a Charity Company. However, if registered only with the Commission alone, it is termed a Charitable Incorporated Organisation (CIO).
  • Company Limited by Guarantee (Property Management) — An institution registered for tenants' benefit, which may also be set up as a company limited by shares.
  • Company Limited by Guarantee (Right to Manage) — Can only be an entity limited by guarantee, which gives leaseholders the right to take over the management of a property from the landlord.

In the next section, we’ll go over each in detail.

Company Limited by Guarantee

As stated, a private company limited by guarantee is registered with Companies House, the official registrar of companies. Unlike a private limited company (ltd), the company does not have shareholders or a framework for raising funds through share capital. However, it has guarantors whose liability is limited to the value of the nominal guarantee they pledge. 

Formation Requirements

  • Company name, subject to the same rules as one limited by shares.  
  • Director and guarantor details, including name, date of birth, nationality, residential address, and service address. Guarantors can be individuals or a corporate body with perpetual succession. 
  • Governing documents, which include articles and memo of association
  • Details of persons with significant control (PSCs), including full name, date of birth, nationality, residential address, service address, nature of control, and three security details for online signature.
  • A registered office address.
  • Bank details.
  • A service address for the initial subscribers, which will appear in the company public register.
  • Standard Industrial Classification (SIC) code that describes the business activity.

Insight

In a standard CLG, the memorandum of association specifies that the members agree to guarantee a certain amount towards the company's debts. The articles outline how the company will be managed and operated, including details on membership, decision-making processes, and financial matters.

Read also: Director Service Address vs Registered Office Address 

Key Features 

  • The company is a legal person separate from its owners.
  • Offers limited liability protection, restricting the liability of the members to the value of the guarantee provided at the point of formation. 
  • Incorporated and regulated by the Registrar, subject to the Companies Acts. 

Company Structure

A company limited by guarantee works through the following structure — 

  • Directors (at least one) — Like a Ltd, members must appoint directors to manage its day-to-day operations. 
  • Committee and powers — Directors can delegate certain responsibilities to sub-committees. 
  • At least one guarantor — Similar to shareholders, they guarantee to pay a certain sum in case of insolvency. 
  • Meetings and voting — The members can attend meetings, vote, appoint, and remove directors. 
  • Company secretary — The CLG may opt to appoint a company secretary who helps the director oversee that the company complies with all statutory requirements. 
  • A service address for the initial subscribers appears in the company public register.
  •  Standard Industrial Classification (SIC) code that describes the business activity.

Filing Requirements

The CLG must file the following documents with the company’s Registrar — 

  • Annual confirmation statements 
  • Annual accounts
  • Report company changes 
  • Accounts and company tax returns for HMRC
  • VAT Returns, PAYE reports, and Self Assessment tax returns (as relevant)

The company must also maintain a register of members and a register of Persons With Significant Control. 

Suitability 

A company limited by guarantee is suitable for membership ventures seeking to pursue non-profit objectives for the benefit of the members under limited liability protection.

Warning

Technically, according to company law, a business limited by guarantee is not a charity but is legally considered a non-profit. Non-profit institutions encompass a wide range of entities that operate for the public benefit without the primary goal of making a profit. A Charity Company, on the other hand, is a specific subset of a non-profit established for philanthropic purposes and must be registered with the Charity Commission to obtain charitable status.

Company Limited by Guarantee Charity

Depending on the registration process, two main types of charity companies are limited by guarantee. These are —

  • A charity company is a CLG registered with the Registrar and the Commission. 
  • Charitable incorporated organisation (CIO), a CLG registered only with the Commission.

Formation Requirements (Charity Company)

Insight

Charity Companies are peculiar, for they have to abide by the regulations of the Companies Act, 2006, as implemented by the Registrar, and the Charities Act 2022, as implemented by the Charity Commission. In the registration process, you first register your company with the Registrar, then incorporate it as a charity with the Commission.

On the side of Companies House registration, the following are the requirements for registering a charity company.

  • To register, it is essential to ensure the charity name is available by searching both the company and charity register. 
  • The directors of the CLG automatically become the trustees of the charity company, and new trustees can also be appointed to add to the number. 
  • Objectives must pass the public benefit test. 
  • Governing Documents, including the articles and memorandum of association.
  • Registered office address and bank details.

Insight

For a charity company, the memorandum of association must clearly state that the company is formed for benevolent purposes, while the articles should outline how the company will be governed, including provisions related to charitable activities, distribution of profits, and compliance with charity regulations.

Key Features

  • The company is a separate legal entity from the trustees and guarantors
  • Liability is limited to the value of charity assets 
  • A charity is answerable to both the Registrar of Companies and the Commission.

Structure 

It works through the following structure — 

  • Trustees who are responsible for running the entity. 
  • Guarantors are members of a company limited by guarantee continue to support the objectives of the venture. 
  • PSCs or beneficial owners who exercise control over the company.

Filing Requirements

The CLG must file the following documents with the company’s registrar — 

  • Annual confirmation statements 
  • Annual accounts
  • Report company changes 
  • Accounts and company tax returns for HMRC
  • VAT Returns, PAYE reports, and Self Assessment tax returns (as relevant)

The company must also maintain a register of members and a register of Persons With Significant Control. 

Read also: Your HMRC UTR Number Explained

Suitability

A charity company is suitable for individuals or entities seeking to implement projects or programs that benefit the public or a target population.

Understanding the Difference Between Companies Limited by Guarantee vs Charity Companies Vs Charitable Incorporated Organisation
Feature Company Limited by Guarantee Charity Company Charitable incorporated organisation (CIO)

Registration process

Registered by Companies House

Incorporated with the Commission after being registered at Companies House.

Registered with just the Charity watchdog for England and Wales.

Registered office address and SIC code

Requires a registered office address, and sic codes must be provided during registration.

Only the address of a contact person is required.

Governance documents

  • Articles of association

  • Memorandum of association

A company constitution that outlines its structure, rules and operations.

Director/Trustee salary

Can pay directors a salary for running the institution on behalf of the owners (members) for their roles and responsibilities.

Trustees or directors are considered volunteers and are not eligible for pay unless otherwise specified in a governing document.

However, such individuals may receive remuneration for services rendered in their professional capacity (and not simply for being a trustee.)

Legal entity

The company becomes a distinct legal person separate from its guarantors.

Incorporated body with a legal status distinct from trustees and members.

Liability

Liability of the guarantors is limited to the amount provided as a guarantee.

Only the charity is liable if the company becomes insolvent. Liability is limited to the assets of the charity.

Structure

A CLG has the following —

  • Directors are responsible for the daily management of the company.

  • Guarantors provide financial backing by providing a nominal amount to cover company debts in case of insolvency.

  • PSCs are the guarantors or directors with the capacity to influence the operations of the company.

Once the CLG is incorporated and gains its charitable status, the following becomes the new structure —

  • The directors transition to become the trustees of the company.

  • The guarantors become members without the responsibility to provide financial backing since liability is now limited to the value of the charity assets.

  • PSCs in the CLG transition to being PSCs in the charity company.

A CIO structure includes —

  • Trustees are responsible for daily management.

  • Members.

Tax benefits

Not automatically eligible for tax benefits

Eligible for tax benefits. For example, the entity can reclaim an additional 25% tax on eligible donations from UK taxpayers in schemes like Gift Aid.

Funding

It relies on funding sources such as membership fees and commercial activities. Can trade to raise funds

Eligible to rely on donations and other revenue streams, including trading, to raise funds.

Can trade, but not allowed to depend solely on trading as a means of raising funds for itself.

However, it can set up a wholly owned and controlled subsidiary for this purpose.

Profit distribution

Profits are reinvested to support the objectives of the company.

Profits and assets cannot be distributed to members but are reinvested to support the charity objectives of the company.

Filing requirements

The Registrar's filing requirements

  • Confirmation statements

  • Annual returns

  • Financial statements

If the commission has incorporated a CLG, it can also file —

  • An audit exemption report if eligible.

The regulatory burden of the CIO is simpler and lighter than that of a charity company. They are only required to file the above-listed items with the commission.

Objects

Objects must align with the company’s mission.

Objects must be philanthropic and beneficial to the public.

Compliance requirements

Must comply with the company registrar's requirements

Must comply with both the Registrar's and the Commission’s requirements.

Must only comply with the Commission’s requirements.

Suitability

Established for the benefit of its members

Established the benefit of the public.

Difference between a Private Company Limited by Shares and a Company Limited by Guarantee

One of the key differences between a private LTD and a guarantee company is how the two legal structures treat profits. In a limited company, shareholders can opt to distribute profits to its members as dividends or reinvest them back into the company. 

But, a company limited by guarantee is by nature a not-for-profit entity and the guarantors can only reinvest profits back into the business to finance their objectives but not withdraw as profits.

Insight

The law does not explicitly require a CLG to not distribute profits. However, if your intention is to share profits, registering an ordinary private company limited by shares will make more sense.

Company Limited by Shares (LTD) Vs. Company Limited by Guarantee (CLG)
Difference LTD CLG

Objectives

Established for the profit of the shareholders.

Established to advance the objectives of membership organisations such as a co-operative or sports clubs.

Legal structure

Shares in the company represent the degree of ownership.

Guarantors do not own shares or the company but provide financial backing in case of insolvency.

Profit

Withdraws profit as dividends for the benefit of owners.

A CLG cannot withdraw profits from the business for the owner's benefit but must reinvest them to finance the entity's objectives.

Liability

Limited to the value of shares held, whether paid or unpaid.

Limited to the value guaranteed.

Share capital

Company issues shares to shareholders.

In a statement of guarantee, each member agrees to pay a certain amount.

Conversion to a Charity

There is no legal process for converting an LTD into a charity.

A CLG can attain full charity status by being incorporated with the charity commission.

Management

Governed by directors who may or may not be shareholders.

Governed by directors who may or may not be guarantors.

Membership changes

Shares can be transferred between shareholders, subject to restrictions in the articles.

No shares to transfer; membership changes are by resolution and recorded in the register of members.

Distribution of assets during liquidation

Surplus assets are distributed to shareholders in proportion to their shareholdings.

Surplus assets are distributed to other non-profit entities with similar objects.

Yet, with the above differences, the two structures have the following similarities — 

  • Offer limited liability protection to the owners in case of insolvency. They will only be responsible for paying company debts up to the value of shares or guarantee.
  • Registered and some of their pertinent details such as registered address, director information, shareholder and guarantor details, and filings are available in the companies register for public scrutiny. 
  • Are required to have one director, secretary (for public limited companies though optional for ltds and CLGs) and members (who act as shareholders and guarantors.)
  • Established by a memorandum of association, signed by all the initial subscribers agreeing to start the business, and the articles outlining rights, responsibilities, and how the business will manage its operations. 
  • Require registered office address, director service address, and company name found to be available by searching the register.
  • Have similar routes for dissolution, which can either be by voluntary strike-off, Members' Voluntary Liquidation (MVL) (for solvent companies), Creditors' Voluntary Liquidation (CVL) and compulsory Liquidation (for insolvent businesses).  

For the most part, the same rules and regulations apply to companies limited by guarantee as to companies with a share capital.

See also: The Difference Between a Voluntary and Compulsory Strike Off

5 things to know company limited by guarantee

What is the process of forming a company limited by Guarantee?

Registering a company limited by guarantee requires the following — 

  • A company name: Use the uk company public register of companies to find the available and suitable name for your venture. 
  • Registered office and director service address for directors, shareholders and guarantors. 
  • Determine your SIC code aligned to the intended activities of your venture
  • A limited company by guarantee must have at least one director and guarantor. 
  • Statement of guarantee indicating the circumstances during which each subscriber will pay the typically £1 nominal guarantee amount. 

Can guarantors take a share of the profits?

No. Guarantors cannot take out a share of profits because the business structure is designed for non-profit ventures. In case there is surplus income, the entity is expected to reinvest the surplus back into the business. If the members ever decide to take out profits, the company will no longer be considered non-profit and will not be able to apply for charity status. 

What is the difference between a shareholder and a guarantor?

What sets apart a shareholder from a guarantor is their role and expectations within different types of companies. Shareholders are associated with limited companies, whereas guarantors are found in companies limited by guarantee.

Shareholders hold ownership in LTDs and anticipate receiving dividends as returns on their investments. They have a stake in the profits and losses of the company based on the number of shares they hold.

On the flip side, guarantors are connected to companies limited by guarantee. Guarantors are not typically interested in profit-sharing or dividend distributions like shareholders; instead, they serve as a financial backup in case of financial difficulties for the company.

Why set up a limited company by guarantee?

Some of the reasons why members may opt to set up as a CLG include — 

  • Personal liability protection — By forming a CLG, the liability of the company’s members is limited to the amount they agree to guarantee in the event of insolvency, protecting personal assets from being used to settle company obligations.
  • To pursue objectives that benefit society — The enterprise is able to operate as a legal unit while focusing on its core objectives without the pressure of maximizing profits for shareholders.
  • Credibility — Being registered as a limited company can enhance the credibility and reputation of the organisation. It signifies a formal and transparent structure, which can be appealing to stakeholders, donors, and partners.
  • Perpetual succession — It offers perpetual succession, meaning it can continue its existence regardless of changes in membership, a feature crucial for organizations with long-term goals and commitments.

Overall, the decision to incorporate a company limited by guarantee should depend on the specific goals, activities, and interests of the subscribers. If you are doubting if this is a viable option for you, please call us at +44(0) 207 689 7888 or email info@yourcompanyformations.co.uk for a free, no-obligation consultation.

Can a Company Limited by Guarantee Lose Its Charitable Status?

Technically, a CLG does not have charitable status, since it's only acquired after the non-profit is incorporated by the Charity Commission and transforms into a charity company. However, it may lose its right to incorporate into a charity if — 

  • Members take out surplus profits as personal income;
  • If profits are distributed to members as a form of dividend payment.

If the company has already incorporated into a charity, it will lose its status if it takes any of the above actions or fails to — 

  • Adhere to its governing documents particularly pursuing its objectives.
  • Comply with regulatory requirements such as filing confirmation statements and reports to the commission or the registrar of companies. 

Can guarantors take a share as evidence of ownership?

No. A company limited by guarantee must not and cannot issue shares. The guarantors' evidence of ownership is found in the statement of guarantee, where they pledge to provide a nominal amount in case of insolvency. 

The company’s memorandum of association that lists the subscriber agreement to form the venture also serves as proof of ownership. However, there is no stake given in terms of shares. 

Is an article of association relevant to the formation of a not-for-profit company?

Yes, it is a compulsory governing document for uk non-profit company. It documents how the subscribers intend to manage the enterprise. It contains the following information —

  • Directors powers, responsibility and scope for decision making;
  • Process of obtaining membership and resigning
  • Meetings
  • Voting procedures
  • Administrative arrangements

See also: Memorandum and articles of association 101

Guarantee companies vs companies with share capital

A CLG is like an ordinary private company limited by shares. However, unlike LTDs, a non-profit has no shares or shareholders and reinvests surplus income to enable the company to run its day-to-day activities. Yet, both entities are required by law to file accounts at the Companies Registration Office and submit annual returns. The CLG is set up for certain objects for the benefit of its members while an LTD is established primarily for profit-making purposes and to provide returns to its shareholders.

Can limited by guarantee companies have persons with significant control?

Yes. A CLG can have PSCs who exercise ultimate control over the company. Despite the unique structure of CLGs without shareholders or capital in the traditional sense, individuals within the organization can still qualify as PSCs if they meet the criteria outlined in the Companies Act 2006. 

An individual or company who fulfils one or more of the following conditions qualifies as a PSC - 

  • Directly or indirectly holds more than 25% of the voting rights.
  • Directly or indirectly holds the right to appoint or remove a majority of directors.
  • Otherwise has the right to exercise significant influence and control.

Company name requirements for guarantee companies

CLG naming requirements are the same as the business name requirements for private limited companies. Your CLG name must not — 

  • Be too similar or identical to an existing corporation name;
  • Imply any connection with the UK government, local authority or any agency;
  • Include sensitive words like “Charity” without the appropriate permission;
  • Be offensive, inappropriate or likely to cause harm; and
  • Suggest criminal activity or be contrary to public interest.

What is the difference between a Charitable Incorporated Organisation (CIO), a Community Interest Company (CIC) and a Company Limited by Guarantee (CLG)?

The main difference between a CIO and a CIC lies in their legal structure and statutory oversight as explained in the table below.

Charitable Incorporated Organisation (CIO) vs Company Limited by Guarantee (CLG) Vs Community Interest Company (CIC)
Difference CIO CIC CLG

Regulation

Regulated by the Charity Commission according to the provisions of the Charities Act 2022.

Regulated by the CIC regulator according to company law.

Regulated by Companies House according to the company law.

Legal structure

It's a charity, making it a better vehicle for fundraising and enjoys a robust range of tax relief benefits.

Can be a company limited by shares or guarantee

It is a company limited by guarantee.

Governing documents

Governed by a constitution which includes a memo and articles of association

An article and memo of association.

Objects

Can only contain philanthropic objectives according to the provisions of the Charity.

May pursue a wider scope of social aims than CIOs.

Can pursue social aims or revenue generation aims.

Directors/Trustee Salaries

Unless otherwise specified in their governing documents, trustees are considered volunteers and may not receive salaries for their roles as trustees. However, they may receive fair market value remuneration for services rendered to their institution in their professional capacity.

Directors receive salaries for managing the business on behalf of the members.

Asset lock principle

Must include an asset lock provision in their articles, that prevents assets or surplus income from being used for private gain apart from the objects of the company. If solvent during dissolution, and subject to the consent of the regulator, surplus assets can be transferred to another asset locked body.

Does not have a statutory requirement to observe the principle but can include a provision with a similar outcome in its articles.

Trading

Can trade but is not allowed to rely on trading as a primary source of funding.

Can trade and generate income like a private company.

Allowed to trade and rely on trading income as primary source of funding.

Tax benefits

Enjoys multiple tax concessions including —

  • No tax on primary purpose trading, capital gains and investment.

  • Automatic 80% relief from business rates

  • No inheritance tax on legacies

Taxed as a commercial company with little to no concessions.

May not have the same tax advantages as charities but may access rate deductions for voluntary institutions at the discretion of their local authority.

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