How Successful was the Introduction of CICs?Blogs Published: October 7, 2015 8:20 am
The term ‘social enterprise’ is used frequently in conversations about ethical business practices but it’s surprising to hear that in the UK the term doesn’t refer to any specific business model, and is rather a catch all term that includes limited companies, charities and other non-incorporated bodies.
In 2005, the Community Interest Company (CIC) status was introduced as a formal business structure and granted an organisation not holding charitable status the ability to gain formal recognition of their standing as a company working for the social good.
The Benefits of Becoming a CIC
The obvious question that comes to mind when considering whether CIC status is suitable for an organisation is that of why the organisation shouldn’t become a charity. Gaining CIC status allows the organisation to remain a functional profit-making business, but a statutory asset lock is in place to ensure profits are used for the public good.
A CIC is also not subject to trustee control and directors can be paid (albeit according to regulations). One key benefit is known as ‘light-touch’ regulation which seeks to avoid the red tape and administrative barriers often faced by charities. With that said, it’s important to recognise that CICs aren’t able to take advantage of the tax incentives provided for charities.
10 Years On From Conception
Whilst there isn’t one single statistic we can use to judge the success of the CIC, it’s evident from online sources that companies who hold CIC status are enjoying success. The following post on the CIC forum is just one of a few that shows the CIC status having an impact.
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