CICed into touch

If you’re reading this tomorrow, you will have sadly missed your chance to feed into the CIC regulator’s consultation on Dividend Caps and Performance Related Interest.

Community Interest Companies (CICs) are some new structures set-up by the government in 2005. The idea was to provide a company formation (or some company formations) that would be definitively social enterprise – as opposed to charity or ‘straight’ business. My company is one. We have our own regulator.

The current topic of conjecture is whether CIC’s that are limited-by-shares – so can raise cash by selling equity stakes to people hoping to get a share of the profits, should the company make a profit – should keep their current tight-limits on the % of profits they can distribute to their investors.

It would be interesting to know how many currently registered CICs have reached a level of profitability where this has been a problem. Or, in fact, how many existing CICs have sucessfully sold any equity.

Advertisements

4 Comments

Filed under Uncategorized

4 responses to “CICed into touch

  1. We’re not a CIC as you know Martin, the business model specifies at least 50% of profit invested into social purpose.
    To me that offers some scope for investment which would of course result in growth and that 50% being a greater total sum.
    We tried a guarantee company first and found ourselves painted into a corner blocked from coop and charity seed loans. The CIC would have suited, but at the time it wasn’t available. Now we’re a share company.

    Like

  2. beanbagsandbullsh1t

    Well, you can always convert to being a CIC: http://www.cicregulator.gov.uk/forms.shtml

    The CIC model clearly does allow investment. The question – I assume the one that will have been chewed over in the recent consultation – is whether investors are going to be keen to put money into high risk social ventures if there’s a big cap on the returns they can get on their investment.

    There’s the added question – possibly related – question of whether the most important issue for social enterprise is where profits (should there be some) go, as opposed to the social benefits of what the business actually does.

    Like

  3. Sorry I just realised you’re not Martin Murphy! I read today that the head of the Charity Law Association has urged government ot increase the dividend cap to 49%. That brings it in line with the P-CED model of some 9 years earlier proposing “at least 50% re-invested in the community”. This was done such that it might co-exist within the existing free market framework and still provide some investment incentive. So it may be best to wait.

    http://www.p-ced.com/about/history/

    Jeff

    Like

  4. beanbagsandbullsh1t

    I’m not Martin but I do know and like him, so I didn’t want to cause offence by aggressively denying being him.

    I agree that for CLSs ‘what this space’ is probably the best approach re: converting to CICs.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s