Question: The general idea behind the Community Interest Companies (CIC) is to have available a custom made legal vehicle for community and social enterprises where the profits are to be made available for public work.
However, a more focused Community Interest test is in place which has been said to make the implementation of such Companies impossible. Further, it has been said that the Regulator of CIC does not seem to have proper guidance as what constitutes a Community Interest Company.
Do you agree with the above statement? Discuss.
Grade B, University of London
LLB, 2nd year, Company Law
Table of Contents
The View Behind Community Interest Companies 2
Types of CIC 2-3
Implementation of Community Interest Companies 3-4
Objectives of a CIC 4
Community Interest Test and Guidance As To What Constitutes a CIC 4-6
The role of the Regulator 6-7
The duties of the Regulator 7
The powers of the Regulator 7-9
International Comparisons 9
Proposals For A More Focused Community Interest Test 10
Conclusion 10-11
Answer: A Community Interest Company(CIC) is a type of limited company specially set up for social enterprises which want to use their profits and assets in favor of the public. However, they are often wrongly described as being “not for profit”. The more accurate way of addressing it would be that they are businesses fundamentally making profits for the community use as opposed to making profits for private benefits. The CIC is governed by the Companies Act 2006 subject to the Community Interest Company Regulations 2005 and Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 which came into effect on 1 July 2005 and the CIC regulator. The aim of a CIC is achieved by a community interest test and an asset lock which ensures that it is dedicated for the intend......(short extract)
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Details: - Mark: 65% | Course: Company Law | Year: 2nd/3rd | Words: 3003 | References: Yes | Date written: January, 2014 | Date submitted: April 23, 2014 | Coursework ID: 862
