Community Interest Companies (CICs) are limited companies which operate to provide a benefit to the community they serve. They are particularly suitable for community-based organisations which wish to work within the familiar limited company framework, without either the private profit motive or charity status.
The CIC legal structure supports a wide range of activities which range from very small local projects to multi-million pound health services. They apply to all industry sectors and are located in every area of the UK.
CICs were first established in the UK in 2005. More than 13,000 were in existence by June 2017. The CIC sector is regulated by the Office of the Regulator of Community Interest Companies, which works with the Department for Business, Energy & Industrial Strategy. The Regulator’s webinar gives a detailed explanation of the features and purpose of CICs, and their regulation.
Key features of CIC, ensuring a continuous emphasis on community benefit, include:
Mandatory Asset Lock
All CICs have a mandatory asset lock. This is designed to ensure that the assets of the CIC are used exclusively for the benefit of the community. Any assets and retained profits must be retained within the CIC and used solely for community benefit.
Dividend Cap
Chesham CIC is a company limited by guarantee, and cannot pay dividends. A CIC constituted as a company limited by shares can deliver dividends to investors, but these are capped. At least 65% of any profits must be invested back into the company and community. True community benefit is always at the core of any CIC.
Transparency
Each CIC is required to submit on a yearly basis a community interest report, detailing the activities undertaken and how these have benefitted the community.
More Information
Office of the Regulator of Community Interest Companies
Twitter account of the Office of the Regulator of Community Interest Companies