Community Interest Companies (known as CICs) are one of the fastest growing community oriented enterprise movements in the country. Roughly 1 in every 200 new companies last year was a CIC, and as of March 2017 there are more than 13,000 CICs on the Regulators register.
CICs can vary from small ‘kitchen table’ type organisations, to multi-million pound turnover organisations employing thousands of people. They can be set up as both Company Limited by Guarantee and Company Limited by Shares, and are often described as Mutuals or Social Enterprise.
Co-operatives can hold the status and it is feasible for a CIC to make an IPO and hold PLC status. It also provides individuals with a simple legal structure to show leadership tackling their chosen community issue.
Central Govt, Local Govt and Charity are all using CIC to innovate their services, whilst a growing number of private sector companies are converting. It is being used across the country and by all spheres of society.
The CIC legislation was introduced as a legal form under the Companies Act 2006 and subject to that Act and company law generally.
The primary core features of any company holding CIC status are two fold;
- Assets owned by the company are held in an asset lock which secures those assets to applications for the good use of community.
- Limitations applied to dividend and interest payments made to shareholders and financiers ensure a profit can be made, but the primary focus remains on achieving benefit for the community
Both of these features are regulated by the Community Interest Company Regulator via an annual report, known as the CIC34, which is submitted to the Regulators office on an annual basis. The Community Interest Company Regulator’s office is a part of Companies House and governed by The Department for Business, Innovation and Skill – BIS.
The range of industries and markets that CICs are forming within is as varied as the economy itself – the majority currently within traditional Third sector activity areas such as Health and Social Care, Education and Community Services, but with an ever increasing number trading in traditional private sector activities such as property, financial and other professional services.
To represent the CIC Community an Association – known as the CIC Association – was launched on the 9th of September 2009, with 4500+ members as at Jan 2016.
It is the hope of the CIC Association to aid in the development of this legislation to help it continue to represent the growth of community enterprise under CIC regulation as both a brand and landmark legislation.