Hi I am new to running a CIC and am currently a joint director or small health related company. We started with a small pot of funding however income is still slow so our funding is running low.
Does anyone know if there is a minimum amount of money that is required to have in the bank account of a CIC? It had been suggested that we may need to wind up the company if we run out of funds due to tax implications and fines? I cant seem to find anything about this in the documents on this site. Can anyone help? Thanks
It depends on what you've agreed with your bank. If it doesnt have an overdraft then you shouldnt go below a zero balance. you wont receive fines from the bank unless doing something that isnt agreed.
Re tax, you need to understand if you have any liabilities you will need to meet, your accountant will let you know what liability you may have and that needs to be taken into account. Fines are (generally for CICs) related to late reporting and submission of accounts
Thank you for your reply it is extremely helpful. According to 'our' accountant current liabilities are at the most around £500. I did read that that fines for CIC's only relate to late reporting etc, so appreciate your confirmation of this. I believe my business partner (joint director of the CIC) is in the process of trying to get me to agree/push me to wind up the CIC of which we as joint directors we have both been involved in running on a day to day basis for a number of years without any salary.
I am not in agreement with her trying to wind up the CIC (which I believe is to gain profit for her own company) as this goes against my initial principles and reasons for setting up. I am being told by the accountant that the CIC needs to wind up by 31st Jan with less not less than £1000 in its bank account.
Thanks again for your reply any additional advice would be much appreciated.