DEPARTMENT FOR
BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2009/99)
issued by COI News Distribution Service on 6 April 2009
As the 4th
anniversary of the Community Interest Company (CIC) approaches,
the Regulator has decided the time is now right for a review of
the limits on the dividends CICs can pay to their investors. The
review aims to ensure the limits strike the right balance between
promoting opportunities for investment and growth, and maximising
benefits for local communities.
CICs were introduced in July 2005 as a bespoke legal form for
social enterprise, combining the flexibility of a limited company
with a community purpose. The business model enables social
enterprises to attract investment by issuing shares and paying
returns to investors, while a limit is set on those returns to
guarantee the majority of profits are put back into the community.
There are now more than 2,600 CICs in the UK, offering a wide
range of goods and services and making a real difference to the
lives and wellbeing of people across the country.
The Regulator of Community Interest Companies, Sarah Burgess
said:
"I've heard anecdotal evidence about the
impact the current limits have on a CIC's ability to secure
investment. I now want to gather wider evidence so I can take an
informed view about whether or not the limits should be changed
and, if so, how."
Ian Pearson, the Economic and Business Minister welcomed the
review, saying:
"I'm really pleased by how successful Community
Interest Companies have been in less than four years. CICs are
making a real and valuable contribution to their communities, both
in terms of economic strength and also by enhancing the welfare of
local people. And I believe that right now we should be
encouraging and supporting social enterprise, to make sure the
sector is in the best position to expand and prosper - so I look
forward to hearing the outcome of the Regulator's review."
Kevin Brennan, Minister for the Third Sector, said: "In
these tough times, people are looking for ethical business models
that give something back to the local community. Social
Enterprises can meet that need well, and the CIC is a business
model that enables them to benefit the communities they serve. Now
is a good time to review the CIC model in the light of the
practical experiences of Social Enterprises."
The review will run for 12 weeks, closing on 19 June 2009. Full
details of the consultation and how to respond can be found on http://www.cicregulator.gov.uk
Examples of CICs
* In November 2008 Eastbourne Football Club became the 2,000th
registered CIC. The Club offers association football as well as
other sporting, recreational and educational activities to
encourage and promote the physical and mental wellbeing of the
community residents in Eastbourne.
* The WellBeing Project, a Merseyside social enterprise, offers
alternative treatment for local people suffering mental health
problems, helping them to recover and eventually return to
employment. The CIC is run jointly by a GP and businesswoman, who
have combined their expertise to offer an innovative service to
their community. Their ambition is to become a national leader in
the social prescribing arena.
Notes to editors:
1. CICs are a type of limited company created by the Companies
(Audit, Investigations and Community Enterprise) Act 2004 and the
Community Interest Company Regulations 2005 (SI 2005 no 1788).
2. The Community Interest Company Regulator is appointed by the
Secretary of State for the Department of Business, Enterprise and
Regulatory Reform.
3. Information about CICs and the consultation on the dividend
and interest caps is at http://www.cicregulator.gov.uk
Department for Business, Enterprise & Regulatory
Reform
7th Floor, 1 Victoria Street, London SW1H 0ET
Public enquiries +44 (0)20 7215 5000
Textphone +44 (0)20 7215
6740 (for those with hearing impairment)
http://www.berr.gov.uk