Co‑op vs CIC vs Ltd vs LLP: which legal structure?
Choosing a legal form is one of the first big decisions when you start a values‑driven business. This page compares the five structures UK founders most often weigh up — a registered co‑operative society, a community benefit society, a Community Interest Company, a company limited by guarantee and a limited liability partnership (LLP) — so you can match the structure to how you want to own, govern and finance your organisation.
General information only — not legal or financial advice. Some links on this site are affiliate or paid directory listings; this never changes our editorial comparisons. Always confirm the current rules with Companies House, the FCA or a qualified adviser before you register.
The 30‑second version. Want democratic, member control? Look at a society. Want a recognised social‑enterprise badge with an asset lock? Look at a CIC. Want the cheapest, most familiar wrapper for a member‑run not‑for‑profit? A company limited by guarantee. Want a flexible profit‑sharing vehicle between professionals? An LLP.
The structures side by side
Read each column as a whole rather than picking a single row — the right choice usually depends on how several factors line up together. "Typically" reflects that exact costs, timings and rules vary by registrar, by your governing document and over time.
| Feature | Registered Co‑operative Society | Community Benefit Society | Community Interest Company (CIC) | Company Ltd by Guarantee | LLP |
|---|---|---|---|---|---|
| Owned / controlled by | Members, who are usually the people the co‑op serves (workers, consumers, producers) | Members, but run for the benefit of the wider community rather than members themselves | Usually directors; can have wider membership, but not required to | Members (guarantors) who appoint directors | The partners (members) who run the business together |
| One‑member‑one‑vote | Yes — a defining co‑operative principle | Yes — democratic member control | No — voting follows the company's articles (often share‑ or director‑based) | Typically yes by default, but the articles can vary it | No — governed by the LLP agreement, often by capital or seniority |
| Registered with | FCA mutuals register (CCBSA 2014) | FCA mutuals register (CCBSA 2014) | Companies House (plus the CIC Regulator) | Companies House | Companies House |
| Asset lock | Optional — can be built into the rules | Yes — statutory asset lock available and common | Yes — statutory asset lock is mandatory | No statutory lock, but charitable or "not‑for‑profit" clauses can be added | No — assets belong to the members |
| Can pay investor returns | Yes — limited interest on share capital permitted | Limited — interest may be paid but profits serve the community | Capped — dividend and asset‑lock limits apply | No dividends (no share capital); surpluses are reinvested | Yes — profits shared among members per the agreement |
| Typical use | Worker, consumer, retail, agricultural and multi‑stakeholder co‑ops | Community shops, pubs, energy, sports and amenity projects | Social enterprises trading for a clear community benefit | Clubs, charities, membership bodies, community groups | Professional practices and joint ventures (e.g. consultancies) |
| Setup cost | Higher — FCA fee plus rules; model rules reduce cost | Higher — similar to a co‑op society | Low–moderate — Companies House fee plus CIC36 form | Low — standard Companies House fee | Low — standard Companies House fee |
| Ongoing filing | Annual return and accounts to the FCA | Annual return and accounts to the FCA | Companies House accounts plus an annual CIC report | Companies House accounts and confirmation statement | Companies House accounts and confirmation statement |
| Best for | Genuine member ownership with trading freedom | Community‑benefit projects raising community shares | A trusted social‑enterprise badge with an asset lock | Simple, low‑cost democratic not‑for‑profits | Flexible profit‑sharing between active partners |
Note: "registered co‑operative society" and "community benefit society" are the two forms of registered society under the Co‑operative and Community Benefit Societies Act 2014. The word "co‑operative" is a sensitive word at Companies House, so a CIC or company wanting it in their name normally needs approval.
When to choose each structure
Registered co‑operative society
Choose this when democratic member ownership is the point of your organisation and you want freedom to trade commercially. A co‑operative society runs on one‑member‑one‑vote, can pay limited interest on members' share capital, and can raise capital through community or member shares without a full prospectus. It suits worker, consumer, retail, producer and multi‑stakeholder co‑ops. The trade‑off is a higher setup cost and FCA registration — using model rules from a sponsoring body keeps this manageable. See our worker co‑operative guide and what is a co‑operative?
Community benefit society (BenCom)
Choose this when the business exists to benefit the wider community rather than its own members, and you want to raise money locally. A statutory asset lock reassures supporters that money stays in the project, and community share offers are a well‑trodden route for shops, pubs, renewable energy and sports clubs. It is the natural home for crowdfunded community ownership. Explore the model in our community co‑operative guide and funding a co‑operative.
Community Interest Company (CIC)
Choose this when you want a recognised social‑enterprise brand backed by a mandatory, regulator‑enforced asset lock, but prefer the familiarity and speed of Companies House. A CIC is quick and relatively cheap to set up via the CIC36 form, and the annual CIC report demonstrates community impact. Returns to investors are capped. It suits social enterprises that want flexible director‑led control rather than formal member democracy — though you can still build participation in. Compare it against co‑operative models throughout our guides.
Company limited by guarantee
Choose this when you want the simplest, lowest‑cost wrapper for a member‑run not‑for‑profit — a club, association, membership body or community group — and especially if you may seek charitable status later. There is no share capital, so no dividends; surpluses are reinvested in the purpose. Governance is familiar to banks, funders and accountants. It does not carry a statutory asset lock by default, so add suitable clauses if asset protection matters. See how to start a co‑operative for the practical steps.
Limited liability partnership (LLP)
Choose this when a small group of active partners want to run a business together, share profits flexibly and limit personal liability — common for consultancies, agencies and professional practices. Some worker co‑ops use an LLP and write co‑operative principles into the members' agreement. It offers tax transparency (members are taxed individually) but is less suited to broad public membership or raising community capital. If member democracy is central, weigh it against a society in our worker co‑op guide.
A quick decision helper
If you are still weighing it up, these prompts capture the most common trade‑offs. Match the one that sounds most like you, then read the matching guide.
Choose a co‑operative society if you want… genuine member ownership, one‑member‑one‑vote, the ability to pay limited interest on members' shares, and freedom to trade — and you are comfortable registering with the FCA. → Worker co‑ops
Choose a community benefit society if you want… to own an asset for the community, lock those assets in, and raise money through a community share offer. → Community co‑ops
Choose a CIC if you want… a well‑known social‑enterprise badge, a mandatory asset lock, and a fast, low‑cost Companies House route with director‑led control. → Browse guides
Choose a company limited by guarantee if you want… the simplest, cheapest democratic not‑for‑profit wrapper, with the option to become a charity later. → How to start
Choose an LLP if you want… a flexible profit‑sharing vehicle for a small team of active partners, with limited liability and individual taxation. → Worker co‑ops
Still genuinely unsure? Many founders combine elements — for example, a society with an asset lock, or an LLP with co‑operative rules. A short conversation with a specialist adviser can save months. → Find an adviser
A few things people get wrong
- "I must put co‑operative in the name." You don't. Co‑operative identity comes from your rules and governance, not your registered name. At Companies House the word is sensitive and needs approval; societies adopt co‑operative principles through their rules.
- "A CIC is a type of co‑op." It isn't. A CIC is a company with a community purpose and an asset lock. It can be governed co‑operatively, but it is not member‑democratic by default.
- "Societies can't pay anything to members." A co‑operative society can pay limited interest on member share capital; the limits exist so the focus stays on the co‑operative purpose, not investor profit.
- "The cheapest option is always best." Companies and LLPs are typically cheaper and faster to register, but the right governance and asset protection can matter far more than the initial fee.
Still unsure which structure fits? Compare specialist solicitors, accountants and co‑operative development bodies who set these up every week.
Frequently asked questions
What is the difference between a co‑operative and a CIC?
A registered co‑operative society is owned and democratically controlled by its members on a one‑member‑one‑vote basis and is registered with the FCA. A CIC is a company registered at Companies House with a statutory asset lock and a community purpose; it is usually controlled by directors rather than a wider membership and does not have to run on one‑member‑one‑vote.
Do I have to use the word "co‑operative" in my name?
No. You can run a co‑operatively governed business under almost any name. "Co‑operative" is a sensitive word at Companies House, so a company limited by guarantee or CIC normally needs approval to use it. Registered societies express co‑operative principles through their rules rather than their name.
Which structure can pay a return to investors?
A co‑operative society can pay limited interest on member share capital. A community benefit society and a CIC have an asset lock that caps or restricts returns. A company limited by guarantee has no shares to pay dividends on, and an LLP shares profits among its members under the LLP agreement.
Is it cheaper to set up a company or a registered society?
Registering a company or LLP at Companies House is typically the cheapest and fastest option. Registering a society with the FCA usually costs more and takes longer — especially with bespoke rules rather than approved model rules from a sponsoring body.
This comparison is general information and not legal or financial advice. Rules, fees and timescales change; verify the current position with Companies House, the FCA or a qualified professional before registering.