What is a CIC?

CIC stands for Community Interest Company. What on earth does that mean? It is a type of limited company but one where the aim is benefit the community rather than to make money for those running it. It is not a charity although there is a regulator who by law needs to see the year end accounts and the annual report. The annual report has to explain what Lily the Pink Ministries has done to benefit the communities that the founding documents said that it would do. These are available on the regulator's own web site so anyone can have a look at them.

The legal documents have to say who will benefit from the activities of the CIC. There are two groups mentioned. Firstly, anyone who can access the web site and understand English. Secondly, those living locally who need support to improve their emotional or mental wellbeing. Before agreeing to register Lily the Pink Ministries CIC the regulator also wanted to see a list of ways that these communities could benefit. The annual report has to explain how these aims have been met.  

There are restrictions on how much the directors can earn, no fat cat salaries are allowed by the regulator. The profits have to go to the community rather than to the directors. The documentation also had to state what use any surplus would be put to. The answer to that was "The range of possible needs that clients may have means that it is unlikely that there will be any difficulty finding ways of spending money on clients."  There is also an asset lock that means that if Lily the Pink Ministries is wound down then all the assets have to be passed on to another not for profit organisation doing similar work .  

So now you know.

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