Q&As

Can a community interest company accept a loan from a director?

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Published on LexisPSL on 26/10/2020

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Can a community interest company accept a loan from a director?

A community interest company (CIC) is a type of limited liability company formed specifically for the purpose of carrying on business for social purposes or to benefit a community. A CIC must comply with usual UK company law requirements, and is also subject to additional regulation to ensure that the CIC's assets, income and profits are used in the interest of the community it is intended to serve. For further information, see Practice Note: Community interest companies.

A CIC's articles of association must comply with the Community Interest Company Regulations 2005 (CIC Regulations), SI 2005/1788, for example the provisions set out in CIC Regulations, SI 2005/1788, Sch 2 which primarily relate to the transfer of assets and the transfer of shares.

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