Regulator of Community Interest Companies launches review
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Issued Date: 06 Apr 2009
As the 4th anniversary of the Community Interest Company (CIC)
approaches, the Regulator has decided the time is now right for a
review of the limits on the dividends CICs can pay to their investors.
The review aims to ensure the limits strike the right balance between
promoting opportunities for investment and growth, and maximising
benefits for local communities.
CICs were introduced in July 2005 as a bespoke legal form for
social enterprise, combining the flexibility of a limited company with
a community purpose. The business model enables social enterprises to
attract investment by issuing shares and paying returns to investors,
while a limit is set on those returns to guarantee the majority of
profits are put back into the community.
There are now more than 2,600 CICs in the UK, offering a wide
range of goods and services and making a real difference to the lives
and wellbeing of people across the country.
The Regulator of Community Interest Companies, Sarah Burgess
"I've heard anecdotal evidence about the impact the current limits have
on a CIC's ability to secure investment. I now want to gather wider
evidence so I can take an informed view about whether or not the limits
should be changed and, if so, how."
Ian Pearson, the Economic and Business Minister welcomed the
"I'm really pleased by how successful Community Interest
Companies have been in less than four years. CICs are making a real and
valuable contribution to their communities, both in terms of economic
strength and also by enhancing the welfare of local people. And I
believe that right now we should be encouraging and supporting social
enterprise, to make sure the sector is in the best position to expand
and prosper - so I look forward to hearing the outcome of the
Kevin Brennan, Minister for the Third Sector, said: "In these
tough times, people are looking for ethical business models that give
something back to the local community. Social Enterprises can meet that
need well, and the CIC is a business model that enables them to benefit
the communities they serve. Now is a good time to review the CIC model
in the light of the practical experiences of Social Enterprises."
The review will run for 12 weeks, closing on 19 June 2009.
Full details of the consultation and how to respond can be found on http://www.cicregulator.gov.uk
Examples of CICs
* In November 2008 Eastbourne Football Club became the 2,000th
registered CIC. The Club offers association football as well as other
sporting, recreational and educational activities to encourage and
promote the physical and mental wellbeing of the community residents in
* The WellBeing Project, a Merseyside social enterprise,
offers alternative treatment for local people suffering mental health
problems, helping them to recover and eventually return to employment.
The CIC is run jointly by a GP and businesswoman, who have combined
their expertise to offer an innovative service to their community.
Their ambition is to become a national leader in the social prescribing
1. CICs are a type of limited company created by the Companies
(Audit, Investigations and Community Enterprise) Act 2004 and the
Community Interest Company Regulations 2005 (SI 2005 no 1788).
2. The Community Interest Company Regulator is appointed by
the Secretary of State for the Department of Business, Enterprise and
3. Information about CICs and the consultation on the dividend
and interest caps is at http://www.cicregulator.gov.uk
Department for Business, Enterprise & Regulatory Reform
7th Floor, 1 Victoria Street, London SW1H 0ET
Public enquiries +44 (0)20 7215 5000
Textphone +44 (0)20 7215 6740 (for those with hearing impairment)
About the Author
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from the BERR-
Department for Business, Enterprise and Regulatory Reform replacing DTI
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Article Published/Sorted/Amended on Scopulus 2009-04-07 12:06:18 in Business Articles