Community Interest Company

What is a Community Interest Company?

A Community Interest Company (CIC) is a type of UK company created specifically for social enterprises that aim to benefit the public. CICs allow businesses to use their profits and assets to support the community, combining the flexibility of a standard company structure with special measures to ensure they work towards social objectives. Like other companies, CICs must prepare and file annual accounts.

What is a Social Enterprise?

A social enterprise is a business that prioritises social objectives, reinvesting profits into the community or back into the business rather than maximising profits for shareholders. Social enterprises tackle social and environmental issues across all sectors of the economy, helping create a sustainable and inclusive economy. They can range from local community groups and mutual organisations like co-operatives to large-scale national or international entities.

There is no single legal structure for a social enterprise; it could be a company limited by guarantee, a company limited by shares, an industrial and provident society, a registered charity, or an unincorporated organisation.

What Does a Community Interest Company Do?

CICs work to meet specific social objectives, which may include:

• Community development and inclusion
• Environmental improvement
• Fair trade
• Healthcare
• Support services

Social enterprises are essential in delivering innovative services at the local level, empowering communities, and revitalising disadvantaged areas.

Can a Charity be a Community Interest Company?

A charitable company in England, Wales, or Scotland can convert to a CIC with the Charity Commissioner’s or Scottish Charity Regulator’s consent, though it would lose its charitable status and related tax benefits. However, a charity may own a CIC, allowing the CIC to transfer assets to the charity.

Further Reading:

Companies House: Setting Up a Community Interest Company (CIC) – This link provides a step-by-step guide for setting up a CIC in the UK. It’s helpful for understanding the specific requirements, documentation, and regulations involved in establishing a CIC, making it a practical resource for anyone considering this structure for their social enterprise.

GOV.UK: Social Enterprise Explained – This page offers a broader look at social enterprises, explaining what they are, how they operate, and what legal forms they might take. It’s valuable for individuals exploring the social enterprise model and seeking to understand the distinctions between social enterprises and traditional business structures.

The Charity Commission: Converting a Charity to a CIC – This link from the Charity Commission explains the process and considerations involved in converting a charity to a CIC, including the loss of charitable status and associated tax benefits. It’s particularly useful for charities considering a switch to a CIC model, helping them weigh the pros and cons and understand the regulatory steps required.

For more detailed insights into companies, including CICs and their filings, explore our Business data product which provides extensive Company Data on all UK-registered companies.