Contact Details. Address:

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1 Contact Details Website: Address: The Office of the Regulator Community Interest Companies Room 3.68 Companies House Crown Way Cardiff CF14 3UZ. Telephone:

2 The Community Interest Company Option Sara Burgess Regulator of Community Interest Companies

3 Past In the past there were no CICs There were Charities IPS and cooperatives Companies Limited by Guarentee All of these allowed their founders to work for the benefit of an identified group of people or a community

4 BUT Some people were looking for something else for instance To be an ordinary business and earn a living but with social purpose built into the business Be recognised like a charity but not be branded as charitable To be accountable

5 Background Consultation CAICE Act 2004 Culture of Social Enterprise/Brand Growth Ensure asset lock

6 Update Legislation is in it s 10th year and CICs have changed the social enterprise landscape. Increasingly recognised and importantly understood as a protected financial model.

7 Why become a CIC? No tax benefits No gift aid on donations Extra requirements» Yet 7700 are doing it The brand The statement The commitment

8 What are CICs? Companies with special features that are regulated to ensure they provide community benefit and use their assets for the purpose of the company.

9 Activities CIC Activities - Range and type health and social care, business advice, education and training, employment and transport, media, radio, TV, tourism, regeneration, recycling wind farms tidal energy, even a vertical farm interesting from a regulators perspective.

10 The CIC Bubble Regulation Regulation Legal Structure Flexible Form Statutory Clauses in Articles of Association Statutory Asset Lock Community Interest Test Annual Report Transparent Regulation Regulation

11 The Asset Lock Statutory requirement to ensure assets are used for the benefit of the community Restrictions on winding up Prevents the CIC giving away the communities assets at less than the true market value unless to another asset locked body Caps dividends and performance related interest

12 Community Interest Test Reasonableness Test Activities for benefit of community Use of profit Publicly accountable

13 Community Benefit motivation for the activities of the company Community Benefit To define the community no political motivation Cannot be a charity

14 CIC 34 Annual Report Confirming objectives met through activities/community benefit Confirming Directors Salaries Confirming Asset lock Ensuring no campaigning Ensuring no political activity Looking at viability

15 Finance Grant and loan funding Donations Equity funding Bank loans Contracts Trading

16 Good Governance Integral to good governance Clear Structure Meeting the criteria Understanding the process Understanding company law requirements Ensuring solvency Strategic Direction and managing the business/setting policy Ensuring compliance with governing documents Annual reporting Know your business Transparency Role of director (who is and who is not one)

17 Competitive advantage Regulation is usually associated with restriction CICs don t take it this way The Regulator doesn t use it this way Regulation can build confidence In behaviour In activity In use of funds In reputation

18 The CIC Regulator The CIC Regulator is appointed by the Secretary of State Based at Companies House to Create awareness of the CIC option Make decisions about eligibility Investigate where there is cause for concern Take action if needed

19 Dual Role Registration Regulation

20 Regulator Powers Investigatory and Supervisory For mismanagement or misconduct or bringing CIC into disrepute Remove or put in directors Appoint a manager Audit accounts Hold property Hold up liquidation

21 Regulation Ensures community benefit and the asset lock Confirms eligibility Light touch The Annual report demonstrates transparency in How the activities benefited the community Who was consulted and the outcome What payments were made to directors What assets were transferred What dividends were paid What performance-related interest was paid on loans and debentures

22 Regulation Complaints Starting to form the main area of work Increasingly complex Requiring deeper scrutiny Time consuming but important Often wider than just CIC legislation

23 The Value of Regulation Today Recognition that there is a body aimed at increasing and maintaining confidence in CICs. a CIC abusing it s role could undermine the brand reputation and the wider work of the CIC community. CICs are not like ordinary companies and we expect them to make a positive effort to resolve issues at the earliest opportunity. We would rather not be involved but if we are and the matter is considered serious then we will take action.

24 Benefits of the Model Limited liability; flexible company form; easy to set up Tight governance Greater transparency of operation More flexibility than a charity Light touch regulation, (but no tax advantages) A statutory asset lock and regulated community purpose differentiates it from ordinary companies There is continuity of social purpose A unique brand which provides a higher profile

25 The future More complex and complicated businesses More need for Regulation New challenges with spin offs Better understanding by the general public Public service delivery

26 Contribution to the social economy CICs are a movement in their own right They are all over the UK and growing They range from very small to quiet large 90% of the recent health spin outs are CICs They are unique

27 Contact Details Website: Address: The Office of the Regulator Community Interest Companies Room 3.68 Companies House Crown Way Cardiff CF14 3UZ. Telephone: