Creating a Community Interest Company / Social Enterprise
This guidance will help you to decide if your practice or a consortium of practices should form a Community Interest Company to run Practice Based Commissioning or perhaps some elements of commissioning or community services outside your Primary Care Organisation.
What is a community interest company (CIC)?
A CIC is a new type of company, designed for social enterprises that want to use their profits and assets for the public good. CICs will be easy to set up, with all the flexibility and certainty of the company form, but with some special features to ensure they are working for the benefit of the community.
What is a Social Enterprise?
A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners. Social enterprises tackle a wide range of social and environmental issues and operate in all parts of the economy. By using business solutions to achieve public good, the Government believes that social enterprises have a distinct and valuable role to play in helping create a strong, sustainable and socially inclusive economy.
Social enterprises are diverse. They include local community enterprises, social firms, mutual organisations such as co-operatives, and large-scale organisations operating nationally or internationally. There is no single legal model for social enterprise. They include companies limited by guarantee, industrial and provident societies, and companies limited by shares; some organisations are unincorporated and others are registered charities.
Why were community interest companies needed?
Social enterprises are an exciting and fast-growing sector. Yet some of the legal forms were originally designed for completely different types of organisation. The Government wants to support the sector by creating a modern and appropriate legal vehicle and to help raise their profile.
What will a community interest company do?
CICs will be organisations pursuing social objectives, such as environmental improvement, community transport, fair trade etc. Social enterprises are playing an increasing role in regenerating disadvantaged areas, empowering local communities and delivering new, innovative services at local level.
The Government does not intend that CICs should deliver essential public services in core sectors such as hospitals and schools. Rather, CICs should develop to meet the needs of local communities, complementing core Government services in areas such as childcare provision, social housing, leisure and community transport. The CIC is a flexible form that will allow such enterprises to grow and expand their activities.
What was wrong with the existing legal forms?
Currently companies that do not have charitable status find it difficult to ensure that their assets are dedicated to public benefit. There is no simple, clear way of locking assets to a public benefit purpose other than applying for charitable status. The Community Interest Company will help to meet the need for a transparent, flexible model, clearly defined and easily recognised.
Everything you need to know about Community Interest companies and social enterprises can be found on the website of The Regulator of Community Interest Companies
The Regulator of Community Interest Companies, Room 3.68, Companies House, Crown Way, Cardiff, CF14 3UZ
Tel: 029 2034 6228 (Voicemail)
Fax: 029 2034 6229
There is a Frequently Asked Questions section which should answer the vast majority of your questions, and there is a full set of Guidance Notes Contents - clicking on each of the headings will take you to a detailed explanation.
Annex D of the Guidance Notes lists a number of examples of completed forms so that you can see the type of information required to gain acceptance of your application.
It is understood that the people dealing with enquiries at the Regulator’s Office are extremely helpful and will answer all of your questions.