The Community Interest Company （CIC） was formulated to address the lack of legal means for non-charitable social enterprises in the UK. There have been more than 3,100 now since 2005. The scale of CIC adapts from small community organizations to multi-million pound companies.
Basically, CIC is a normal company. They can be established as a guarantee company (CLG), and about three quarters are companies or joint stock companies (CLS). However, they have some unique and important additional features to protect their social mission.
However, charities must be set up specifically for charitable purposes: as long as their activities are carried out for the benefit of the community, they can be set up for any legitimate purpose.
Comparison:
Charities have certain tax advantages that CICs do not have. In return, charities are more heavily regulated than CICs.
The legal form of CIC is to provide a special legal framework and “brand” status for those social enterprises that want to adopt a limited company form.
CICs will operate free of charge for businesses compared to charities (eg, individual shareholders of CICs limited to pay dividends may be limited), but stakeholders in CICs will still have social benefits to guarantee the assets provided by locks and transparency through the report of community interest to them The ability to move.
However, a charity may have a CIC company, and CIC will be allowed to transfer assets to charities. For example, this allows CIC to run a charity store and transfer all profits to its own charity.
For our football community platform, we believe that CIC is a better platform than charity. There are serval reasons. Firstly，we hope that the relative freedom of non-charitable companies will work for the benefit of the community to identify and adapt to the environment, but clearly guarantee the non-profit distribution status. What’s more，Members of the charity can only be paid if the constitution contains such power and can be considered to be in the best interest of the charity. This means that in general, the founder of a social enterprise that wants to get paid cannot be a member of the board of directors, and must give the strategic control of the organization to the volunteer committee, which is often unacceptable. Furthermore, the definition of community interest applicable to CIC is more extensive than the charity organization’s public interest test. CIC is specifically determined with social enterprises. Therefore, we feel that this is more suitable than charity status.
References：
Gov.uk. (2018). Office of the Regulator of Community Interest Companies – GOV.UK. [online] Available at: https://www.gov.uk/government/organisations/office-of-the-regulator-of-community-interest-companies [Accessed 1 Apr. 2018].
Thirdsector.co.uk. (2018). How to: Decide between charitable and CIC status. [online] Available at: https://www.thirdsector.co.uk/to-decide-charitable-cic-status/governance/article/634004 [Accessed 1 Apr. 2018].
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