Community interest companies
Community interest companies

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Community interest companies
  • What is a community interest company?
  • Legal framework
  • Why use a CIC?
  • Meaning of 'community'
  • Asset lock
  • Transfer of assets
  • Return of assets
  • Dividends
  • Performance related interest payments
  • More...

Coronavirus (COVID-19): Following the COVID-19 outbreak, guidance has been issued by the Office of the Regulator of Community Interest Companies regarding some filing and other administrative procedures that have been temporarily suspended or changed. For further details of the impact of COVID-19, see Q&A: Has the Regulator issued any guidance for community interest companies during the coronavirus (COVID-19) crisis?

What is a community interest company?

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. It is a social profit-making enterprise. It is not a 'not-for-profit' organisation, as it must generate profit to remain solvent, but its profits will be applied to its community purpose rather than for private gain.

Legal framework

The principal legislation governing CICs is:

  1. the Companies Act 2006 (CA 2006) and subordinate legislation

  2. the Companies (Audit, Investigations and Community Enterprise) Act 2004, Part 2 and Schedules 3 to 7 (C(AICE)A 2004)

  3. the Community Interest Company Regulations 2005, SI 2005/1788 (the CIC Regulations), and

  4. the Community Interest Company (Amendment) Regulations 2014, SI 2014/2483

  5. the Companies (Miscellaneous Reporting)

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