Community Interest Companies(CIC’s) are exactly that; companies that have the interest of communities at their heart rather than that of making a profit.
Today, the number of CIC’s is increasingly rapidy across the UK with more than 9,000 registered as of March 2014.
Criteria that determines a CIC
A CIC is determined by the following criteria:
* All assests owned by the CIC are held in an asset lock which are then used for the good of the community.
*There are stringent limitations which apply to dividend and interest payments made to shareholders to ensure a profit can be made, but the main focus is still to ensure benefits to the community in which the CIC operates.
In general, CICs vary in size from a multi million pound turnover organisation through to a smaller ‘kitchen table’ organisation. They are often referred to as social enterprises and can operate as a company limited by guarantee or a company limited by shares.
People who set up a CIC have the benefit of working within a simple, legal structure to help their community.
All CIC’s are regulated in the same way as any other company and are governed by the Department for Business, Innovation and Skill – BIS.
In 2009, the government launched the CIC Associaton to help to grow and monitor these type of community enterprises today and for the future.
Commenting on the growth in CIC’s across the UK, the CIC Regulator says, “The CIC model has come a long way in ten years and I am delighted not only that we are well on the way to having 10,000 CICs across the UK by the end of this year”.
Traditionally, most CIC’s tend to be set up to support third and voluntary sector organisations but more recently private sector organisations are going down this route, particularly those working in property and energy services.
For example, Warm Wales-Cymru Gynnes is A CIC that has been established for more than 10 years, the longest established CIC company in Wales. During that time, the organisation has delivered energy saving benefits to Welsh Communities instead of passing profits to its shareholders.
The CIC was originally set up by the National Grid as part of a strategy to meet its corporate responsibility to the Government at a time when the issue of fuel poverty was high on the political agenda.
The principal motivation behind Warm Wales’s work from the very start was to bring partners together with a budget, using whatever sources were available, to deliver cost effective, tangible, fuel poverty relieving measures to Welsh communities. Where households in need fell outside the scope of other funding schemes, the company provided the money so that all were included. The company track-record of managing projects totalling £40 million for improvements to nearly 60,000 homes demonstrates how well this commitment has been achieved.