Community Interest Companies (CICs) are limited companies, with special additional features, created for social entrepreneurs who want to conduct a business or other activity for community benefit and not purely for private advantage.
They fall under the more commonly known label of ‘social enterprise’ and have primarily social objectives, with all profits being reinvested into the company to realise these objectives.
The limitation of CICs is achieved by a “community interest test” and “asset lock”, which ensure that the company is established for community purposes and the assets and profits are dedicated to these purposes. Registration of a company as a CIC has to be approved by the Regulator who also has a continuing monitoring and enforcement role.
“The new breed CICs are not just conceived as an adjunct to charities law. With their simplified regulatory regime, the asset lock to provide donor investor and public confidence, and the yearly social reporting, CICs could prove attractive to a new breed of social entrepreneurs. Under the CIC model, those with the drive to establish trading concerns of social value can keep operational control of what they create.”
Community Interest Company Regulator(Taken from the Regulator’s website)
23 May 2005.
For further information about CICs please take a read of our Recent Posts entry, “What is a Community Interest Company?”