Community Interest Company

A community interest company (CIC) is a limited company (either by shares or guarantee) that provide benefits to a community, or a specific section of a community.  It has the flexibility of a company form and access to a range of financing options that other constituted organisations do not.

Its key features include an asset lock (to stop the transfer of profits or assets for less than their full market value and to protect any remaining assets for the community if you dissolve the CIC) and a community interest statement (describing your social purpose; the business activities you intend to undertake that will be carried out for the benefit of the community or a section of it, or that the CIC's purpose is in the community's or wider public's interest).

CICs must comply with the CIC Regulations and Company Law. Although a CIC does not have the tax exemption benefits of a charity, it does not have the strict reporting requirements of a charity.  It must still provide annual accounts and annual community interest company report for public record, to show what has been done during the year to pursue its pre-specified community interest and to involve the individuals or groups with a particular interest in the CIC.

Read more about community interest companies on the Business Link website.

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.