Community Interest Companies

A community interest company (CIC) is a company that trades for community benefit. The provisions for the CIC were specified in the Companies (Audit, Investigations, and Community Enterprise) Act 2004 and the Community Interest Company Regulations 2005. Subsequent legislation has updated the regulations, most recently the Community Interest Company (Amendment) Regulations 2014.

A CIC may take one of three forms:

• Company without share capital and limited by guarantee. Most CICs are limited by guarantee – the members have all the powers of shareholders except that they own a guarantee, usually to the value of £1, in the CIC.
• Private company limited by shares. CIC equity shares are issued privately to investors. CIC shares are subject to a dividend cap to ensure that while capital can be raised from the private issuance of shares, the CIC cannot be exploited for personal gain. In this way, the CIC attracts equity investment as well as reassuring investors, and other.