Font Size

Regulator of Community Interest Companies launches review


Business Articles
Submit Articles   Back to Articles

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 said:
"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 review, saying:

"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 Regulator's review."

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

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 Eastbourne.

* 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 arena.


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 Regulatory Reform.

3. Information about CICs and the consultation on the dividend and interest caps is at

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

Crown Copyright. Material taken from the BERR- Department for Business, Enterprise and Regulatory Reform replacing DTI - Department for Trade and Industry. Reproduced under the terms and conditions of the Click-Use Licence.

Follow us @Scopulus_News

Article Published/Sorted/Amended on Scopulus 2009-04-07 12:06:18 in Business Articles

All Articles

Copyright © 2004-2021 Scopulus Limited. All rights reserved.