I have just obtained a new client who has set up a community interest company.
I hadnt heard much about these so I have had a trawl through the blurb on the appropriate website.
I seems only a dividend of 5% above base rate can be paid as a dividend and with one share thats 5P!
Does any other accountant have any experience of these and give me the heads up on this type of organisation.
They are not a charity but have a community interest. They are taxed as a normal company. Their assets are locked in and can only be sold at full value.
Is the purpose of these companies just to attract grants and funding but without the hassle of charitable status?
Replies (6)
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Try this article....
/www.accountingweb.co.uk/article/%E2%80%98big-society%E2%80%99-companies-get-details-right/518951
...titled :'Not for profit companies: Get the Details Right'
It details exactly what a CIC is, how they are formed, how they operate and gives a link to further websites for more info. Read the comments made below the article and you will find another link to a proforma of the annual form required.
If you want details of a company limited by guarantee try here:
https://www.accountingweb.co.uk/article/companies-limited-guarantee-get-it-right/517844
Accountingweb have collated all the articles placed onsite relating to company secretarial/corporate governance matters in a Company Law Library so whenever you have such a query suggest you take a look there first.
https://www.accountingweb.co.uk/article/uk-company-law-library/547609#corporate structures
Jennifer Adams FCIS
Associate Editor
I would take exception with one comment in the first article
CICs are not not-for profit companies!
'Social Companies'
Depends what you mean as 'not for profit'.
CIC's are 'Social enterprises that want to use their profits and assets for the public good'
quote from the BIC Community interest Companies Frequently Asked questions leaflet.
The article was written assuming that usual companies limited by shares etc make a profit distributed to their shareholders.
Also see Peter Scholes comment made at the time of publishing the article.
I suppose it does depend on one's interpretation
I am involved with a CIC and we most definitely do make profits - in fact, it is effectively a pre-condition of CIC status that the company is run on a profitable basis. Having spoken to others involved with CICs one thing is clear - the designation "not for profit" is despised.