A social enterprise is a business operated to benefit society or the environment, not purely to generate profits for the business owner or dividend payments for shareholders. Most of their income must eventually come from trade, with profits reinvested to achieve their social or environmental objective.
Community Interest Companies (CIC)
A CIC is a normal limited company with extra features to mark it out as a Social Enterprise.
CICs come under the regulation of the office of the CIC Regulator. The Regulator's job is to make sure that the CIC is genuinely a Social Enterprise and is not abusing the trust that the public expects to put in a Community Interest Company.
By putting the company under the Regulator's scrutiny, the directors of a CIC can clearly demonstrate that the company is genuinely a Social Enterprise venture and not for private profit.
The characteristic of a CIC are:
- Are limited liability companies created with the specific aim of providing benefit to a community
- The CIC structure is designed to meet the needs of social enterprises and ‘not-for-profit' projects
- Combine the pursuit of a social purpose with commercial activities
- Share many of the features of a limited company
- Cannot also be a charity but provides greater flexibility than charitable status!
- Provides recognition of ‘not for personal profit' status of the company (an assest lock prevents the majority of the profits benefiting the directors or stakeholdrs) and ensuring the community identifies and approved benefits from the activities and/or profits of the comapny.
A director is appointed or elected to be a member of the board of a company, who with other directors, has the responsibility for determining and implementing the company's policy. A company director does not have to be a stockholder (shareholder) or an employee of the firm and may only hold the office of director.
A director's duties can include:
- Determining and implementing policies and making decisions.
- Preparing and filing statutory documents with the Companies Office or other agencies.
- Calling meetings, including an annual meeting.
- Maintaining and keeping records.
- Entering the company into contracts with suppliers, lenders and others.
Other guides and resources