Humshaugh Net Zero CIC

About Humshaugh Net Zero

Humshaugh is a parish near Hexham in Northumberland which is working to transition to net zero. Humshaugh Net Zero (HNZ) is a Community Interest Company (CIC) which was formed by residents in 2020 to develop a whole community approach to sustainability.

NICRE has been working with HNZ to create a carbon footprint calculator to quantify and benchmark the parish’s existing households’ carbon emissions.

Find out more

Why did HNZ choose to be a CIC?

HNZ member Herbie Newell explains that choosing to become a CIC was the result of a process of considering the kind of structure that the organisation would need.

They reviewed the pros and cons of four structures:

Association
Simple committee or action group with a time limited constitution
Charitable Incorporated Charity (CIO)
Community Interest Company (CIC)

This process is summarised below

Structure	Information	Pros	Cons
Association	Has a simple constitution that sets out who the members are and how the committee is elected	Easy to form, requiring little admin other than managing: (a) membership (b) meetings of the members (c) meetings of the committee	Unincorporated, so any liability lies with the committee members, and bank accounts and contracts would be in the name of individuals
Simple committee or action group with time limited constitution	Members are required and also a mechanism for agreeing who are members	Easy to form requiring little administration or structure	Accountability can be difficult, and some may see it as a ‘club’ Fundraising can be difficult as there is little structure Holding a bank account would have to be in the names of individuals
Charitable Incorporated Association (CIO)	Must have charitable purposes to be eligible	Liable for tax relief Can apply for charitable funds and grants Incorporated so it is a separate legal entity and can hold bank account and contracts in its own name. Funders are familiar with the structure No liability for members	Charity administration and regulation Limitations on what the organisation can do in compliance with charity legislation Can take a long time to register Not suitable for all trading or making a profit Board members are charity trustees
Community Interest Company (CIC)	A Community Interest Company (CIC) is a non-charitable company which exists primarily to benefit a community or with a view to pursuing a social purpose, rather than to make profit. It is an Incorporated Company which has members.	Must have an ‘asset lock’ meaning any assets or funds left after closure must be given to another similar organisation No distribution of profits Is a separate legal entity and can hold bank account and contracts in its own name. Limited liability for members Funders are familiar with the structure	It is a company and needs company administration The membership needs to be clear as the members have rights The Board members are directors in law

So, how did HNZ decide?

Herbie explains:

1. Where will the bulk of the income (including start up) come from?

Individual gifts and donations
Grants and fundraising
Private sector funding or donations
Selling services or goods

2. Who will be the members?

The wider community
Individuals in the community who commit to being active in supporting the work
Local community organisations?
Parish Council?

3. What is the purpose?

To benefit the members?
To benefit the wider community?
Or both?

4. Is the purpose charitable?

Charitable purposes include things that contribute to:

Relieving poverty
Education
Religion
Health
Saving lives
Citizenship or community development
The arts
Amateur sport
Human rights
Religious or racial harmony
The protection of the environment
Animal welfare
The efficiency of the armed forces, police, fire or ambulance services

5. Contracts, banking & trading

Will the organisation hold a bank account?
Will the organisation be required to sign any contracts?
Will insurance be required to cover any activities?
Will it sell anything?
Board or committee?
Who will appoint/elect the Board/Committee?

Community Interest Company by Guarantee

Articles of Association

Under The Companies Act 2006, Humshaugh Net Zero CIC developed its Articles of Association, which you can view below.

Model Articles of Association

Resources

Further information about HNZ can be found on its website. Resources from UK government to support communities to set up a CIC, and the forms they need to complete to do so, are contained in the links below.

HNZ website Government step-by-step guide Online company registration form