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. It is for those who want to run a business for the community, not just for the benefit of its 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
• a political party, a political campaigning group, 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.

RTM companies do not exist in Scotland, or Northern Ireland.

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