What is a Community Interest Company (CIC)
As a entity that combines the best both – entrepreneurial of a business and the social of a non-profit organization, Community Interest Companies (CIC) have gaining in recent years. CICs are a unique form of social enterprise, designed specifically for those who want to use their business to make a positive impact on society.
What a CIC?
Community Interest Companies (CICs) are a type of company introduced by the UK government in 2005 under the Companies Act 2004. Are designed for social that to use their and for the public good. CICs are regulated by the Office of the Regulator of Community Interest Companies (ORCIC) and are subject to the Community Interest Company Regulations 2005.
Key of CICs
CICs have key that them from companies and charities. Of features include:
| Feature | Description |
|---|---|
| Asset Lock | CICs are required to have an asset lock, which prevents the assets of the company from being distributed to shareholders and ensures that they are used for the benefit of the community. |
| Community Interest Test | Before a company can be registered as a CIC, it must pass a community interest test to demonstrate that its activities will benefit the community. |
| Regulation | CICs are by the ORCIC to that they in the best of the community. |
Benefits CICs
There several to as a CIC, including:
- Access social investment
- Public as a responsible business
- Tax and exemptions
- Legal for directors
Case The CIC Impact
One of a successful CIC is The Big Issue, a that was in 1991 as a social to homeless with a to earn a income. In 2005, The Big Issue became a CIC, it to its social while as a business.
CICs are valuable innovative structure for social that to the best the and worlds. With focus on impact and benefit, CICs are powerful for who to use their spirit to make a difference in the world.
Community Interest Company (CIC) Legal Contract
This contract (“Contract”) made and into by and the parties with to the following:
| Definition | Parties |
|---|---|
| ۱.۱ Community Interest Company (CIC) refers to a legal form of a company specifically designed for social enterprises that want to use their profits and assets for the public good. | ۱.۲ The parties to any or entering into this for the of the legal and related to a CIC. |
Whereas, the Parties to into this to the and related to a CIC and to with legal and regulations.
| Clause | Legal Obligations |
|---|---|
| ۲.۱ Compliance with CIC Regulations | ۲.۲ The Parties hereby agree to abide by the laws and regulations governing CICs as set forth in the Companies Act 2006 and the Community Interest Company Regulations 2005. |
IN WITNESS WHEREOF, the Parties have executed this Contract on the date first above written.
Frequently Asked Legal Questions About CICs
| Question | Answer |
|---|---|
| ۱. What is a Community Interest Company (CIC)? | A Community Interest Company, or CIC, is a special type of company introduced by the UK government in 2005. It a legal for social that to use their and for the public good, than for private gain. CICs are regulated by the Office of the Regulator of Community Interest Companies (ORCIC) and are required to submit an annual community interest report, demonstrating the positive impact they have had on their community. |
| ۲. How is a CIC different from other types of companies? | Unlike companies, CICs have legal to their and for the of the community. Also restrictions the of to with any being and to by the CIC regulator. Additionally, CICs have an “asset lock,” means their are to their social and cannot be to or shareholders. |
| ۳. What are the benefits of setting up a CIC? | Setting up a CIC provide a enterprise with and legal structure, can attract and funding. It a to social responsibility, can to customers, employees, and stakeholders. CICs have to generate through activities while their social mission. |
| ۴. Can a CIC make a profit? | Yes, a CIC can a from its activities. However, any profits must be used to further the social objectives of the CIC, rather than being distributed to shareholders. This is in line with the “asset lock” principle, which ensures that the assets of the CIC are used for the public good. |
| ۵. How is a CIC regulated? | CICs are regulated by the Office of the Regulator of Community Interest Companies (ORCIC), which oversees their formation and operation. The ensures that CICs with their and their community through the annual community interest report. The also has to and take against CICs that to their social objectives. |
| ۶. Can a CIC convert to a different legal structure? | Yes, a CIC can convert to a different legal structure, such as a charity or a regular limited company. This is to the of the CIC and may the of the to its social mission. |
| ۷. Are CICs eligible for tax relief? | CICs are not for the tax as charities, but they for tax benefits, as relief on types of income. For CICs to professional tax to that they taking of any tax incentives. |
| ۸. Can a CIC distribute its assets to members or shareholders? | No, a CIC is from its to or shareholders. The “asset lock” that the of the CIC are to its social and cannot be to for gain. This CICs from companies, may profits to shareholders. |
| ۹. Is a limit the of that a CIC can to shareholders? | Yes, there a on the of that a CIC can to shareholders. Any must be by the CIC and are to a cap, prevents distributions of profits. This is in to that the of the CIC on the community rather than generating for shareholders. |
| ۱۰. Can a CIC be or up? | Yes, a CIC can or up, but this be in with the set out by the CIC regulator. The of the CIC be to another with social and the CIC that its will not a impact on the community it serves. Or up of a CIC requires and with legal requirements. |