Community interest company

A community interest company (CIC, pronounced "see-eye-see", or colloquially, "kick") is a form of social enterprise in the United Kingdom intended "for people wishing to establish businesses which trade with a social purpose..., or to carry on other activities for the benefit of the community".

CICs were introduced by the UK government in 2005 under Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004. They enjoy the flexibility and certainty of the company form, but with statutory provisions to ensure they are working for the benefit of the community. The Regulator of Community Interest Companies provides oversight, which is intended to be "light touch".

CICs have proved popular, with some 10,000 registered in the first ten years of the status being available. CICs tackle a wide range of social and environmental issues and operate in all parts of the economy. By using business methods to achieve public good, it is believed that CICs have a distinct and valuable role to play in helping create a strong, sustainable and socially inclusive economy.

Limited companies that do not have charitable status find it difficult to ensure that their assets are dedicated to public benefit. Before the CIC regime was introduced there was no simple, clear way of locking the support of such a company to a public benefit purpose, other than applying for charitable status.

The community interest company emerged from many sources, often citing the absence in the UK of a company form for not-for-profit social enterprises similar to those in other countries. A first significant proposal for a new company form in the UK was advanced in 2001 in "The case for the Public Interest Company", by Paul Corrigan, Jane Steele and Greg Parston of the Public Management Foundation. This proposal was based on research funded by the Gulbenkian Foundation, Gordon Roddick, and the Office for Public Management, and was influenced by the example of the American public benefit corporation. Stephen Lloyd of Bates Wells Braithwaite is also credited with having conceived of the idea of the "Community Interest Company" and led much of the work on establishment of that legal company form in the UK.

CICs are diverse. They include social and community enterprises, social firms, mutual organizations such as co-operatives, and large-scale organizations operating locally, regionally, nationally, or internationally.

In order for a company to be registered as a CIC, the Regulator must be satisfied that "a reasonable person might consider that its activities are being carried on for the benefit of the community", or at least a section of the community. This community interest test is met primarily by including a suitable objects clause in the articles of association.

In order to meet this test, CICs cannot: