Definition of a Community Interest Company (CIC)
Definition of a Community Interest Company (CIC) and how they differ to Registered Charities.
A community interest company (CIC) is a type of company, designed for social enterprises that want to use their profits and assets for the public good. CICs are easy to set up, with all the flexibility and certainty of the company form, but with special features to ensure they are working for the benefit of the community.
By its very definition, a Community Interest Company are no different from other companies when it comes to preparing and filing their accounts
What is a social enterprise?
A social enterprise is a business with mainly social objectives whose surpluses are reinvested for that purpose in the business or in the community, rather than to maximise profit for shareholders and owners.
Social enterprises tackle a wide range of social and environmental issues and operate in all parts of the economy. By using business solutions to achieve public good, the Government believes that social enterprises have a distinct and valuable role to play in helping create a strong, sustainable and socially inclusive economy.
Social enterprises are diverse, and include:
- local community enterprises
- social firms
- mutual organisations such as co-operatives, and
- large-scale organisations operating nationally or internationally.
There is no single legal model for social enterprises. A social enterprise can operate as a:
- company limited by guarantee or
- company limited by shares or
- industrial and provident society or
- registered charity or an
- unincorporated organisation
What does a community interest company do?
Community interest companies (CICs) are companies pursuing social objectives, such as:
- community development and inclusion
- environmental improvement
- fair trade
- support services etc
Social enterprises are playing an increasing role in:
- delivering new, innovative services at local level
- empowering local communities and
- regenerating disadvantaged areas
Can a charity be a community interest company?
A charitable company registered in England, Wales or Scotland can convert to a community interest company (CIC) with the consent of the Charity Commissioner, or the Scottish Charity Regulator. In doing so, it will lose its charitable status including tax advantages. A charity may however own a CIC in which case the CIC would be allowed to pass assets to the charity.
Charitable companies in Northern Ireland are not able to convert to a CIC until the necessary legislation comes into force.