New CIC for CPI
January 2006
We were delighted to assist the Centre for Public Innovation with incorporation
of one of the first Community Interest Companies (CICs), a new type of company designed
for social enterprises that want to use their profits and assets for the public
good. This is a perfect vehicle for organisations that do not have charitable status
but want to ensure that their assets are dedicated to public benefit. A big attraction
of CICs is that they are subject to much lighter regulation than registered charities
and there is also potential for shareholders to make a modest return on their shares.
To become a CIC, an organisation must be able to satisfy a “Community Interest Test”;
i.e. it must be able to demonstrate that it operates for the benefit of the Community.
It may be established as a company with or without shares and modest dividends can
be paid on the shares, if the company is profitable. The internal structure of the
CIC can be tailored to suit the needs of the company, being as formal or informal
as desired, as long as some basic criteria are followed. The only additional paperwork
required annually is a Community Interest Report, which is to satisfy the CIC Regulator
that the community purpose is still being met. The Regulator will monitor companies
primarily through such reports unless he has cause for concern and the Government
has indicated that it expects the Regulator to be a “light touch regulator” who
will provide advice and guidance on CICs.
The Centre for Public Innovation (CPI), based in London, works to improve the management
and delivery of public services. It specifically targets public and voluntary agencies
providing services for vulnerable people and communities, and those that are striving
to improve their performance, resolve difficult situations or bring about change.
CPI’s specialist interests are in health, substance misuse and criminal justice
and the development of self-help programmes. It offers services such as consultancy,
research and training in both local and national settings.
We advised CPI on the most appropriate corporate vehicle to meet their needs, drafted
new Memorandum and Articles of Association which satisfied the CIC requirements
and provided advice and drafted the various conversion documents, such as the Community
Interest Statement. Previously a company limited by guarantee, CPI became The Centre
for Public Innovation Community Interest Company on 16 November 2005 and was one
of the first companies of its kind to be listed on the official CIC Regulator website.
The Regulator of Community Interest Companies, John Hanlon said: “Community interest
company status signifies that a company operates with a social purpose and uses
its surpluses to promote social aims. The Centre for Public Innovation Community
Interest Company registered on 16 November 2005 is working to improve the lives
of those that are vulnerable, or at risk, by providing support services, education
and financial assistance. I wish the Centre all the best as it seeks to improve
the lives of people, and strengthens the social economy”.
If you would like further information on setting up a Community Interest Company
for social enterprise or public service objectives, please contact Mark Johnson.
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For More Information Contact:
The Projects Partnership Limited Linton House 164-180 Union St
London SE1 0LH
T: 020 7620 0888
F: 020 7620 0778
E: info@tpplaw.co.uk
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