Legal Structure of a Cic

Lloyd said he understands that LLPs have the potential to be more secretive in reporting accounts, but said they work well at creating multi-level financial structures. If you need help setting up an organisation and choosing a legal structure or other issues with your organisation, please contact Community Southwark`s VCS support team: info@communitysouthwark.org or 020 3848 6540 Stephen Lloyd, Senior Partner at Bates, Wells & Braithwaite Solicitors, mentioned the fact that B Corps pays income tax, which, as a new structure, could be intimidating for social enterprises. He pointed to the L3C model in the U.S., which was set up to connect the profit and nonprofit worlds so that L3C companies can take investments from a wider range of sources, but those companies also pay taxes, he said. Please note that social enterprise and not-for-profit have no legal significance – they are ways of doing things; Ideologies. It is the legal structure of an organization that gives it legal significance. Get tips and case studies from Social Enterprise UK, Inspire2Enterprise and UnLtd, or download guides on corporate structures for social enterprises. So, you want to start a business. Is CIC the right approach for your social enterprise project? It really lives up to your individual business goals. Do you need a simple and cost-effective setup? Do you prefer the familiarity of the GmbH structure? Would you need the freedom CIC gives to a charity? As with all important financial and business decisions, you should consult a professional advisor before moving. Recent legal developments include the Community and Co-operative Charitable Corporations Act, 2014.

Cooperatives – they act in the mutual interest of their members, and the registrar assesses the legality of their actions against cooperative principles But is it really possible to find the perfect legal structure for social enterprises and businesses? Probably not, because we all know that there are social enterprises of different sizes. Nevertheless, it was good to discuss this topic at the Pioneer Corporate Legal Structures session at the Skoll World Forum. Less common than companies and not available to all organizations. The registered association structure is only available to genuine co-operatives and non-profit organizations that engage in an industry, trade or business for the benefit of the community. Charities — There are four legal formats for registered charities: charitable foundations, not-for-profit corporations, and two types of not-for-profit organizations (CIOs). The two types of IPR are the foundation model without voting members and association with voting members *Charities can be social enterprises, but it is less likely that a social enterprise would choose a charitable structure if it wanted to be run as a social enterprise. Thus, in 2005, a new non-profit legal structure for social enterprises and non-profit organizations was introduced – the CIC. You must choose a business structure when starting a business that helps individuals or communities (a “social enterprise”). A Community Interest Company (CIC) is a limited liability company established for the specific purpose of providing benefits to a community.

It is a relatively new legal structure adapted to the needs of social enterprises and non-profit projects that combine the pursuit of a social purpose with commercial activities. “A social or community enterprise can use almost any type of structure, either without its own legal personality or without its own legal personality. Most are likely to register as Community Interest Company (CIC), ordinary limited liability company (non-CIC) or limited liability company, registered non-profit companies or mandated not-for-profit companies. (Russell-Cooke Voluntary Sector Legal Handbook) The proven structure of the limited liability company with directors and shareholders or members is relatively easy to set up and manage. Charities are much more complicated. This familiar structure can facilitate relationships with other organizations, such as government agencies. While it is not possible to move from one structure to another, a non-profit organization generally has a great deal of freedom to identify and adapt to circumstances, and may be able to take advantage of opportunities in a way that would not be possible (or so easy) with other, more rigid business structures. It should be remembered that the term “social enterprise” has no legal meaning. In fact, at least 60% of all charities would also fall under the category of social enterprises. The limited liability company structure, which forms the basis of a common interest company, can provide the flexibility to meet the individual needs of different organizations. A CIC can be incorporated as a limited liability company, a limited liability company or a public limited company.

As a type of limited liability company, a community benefit company has its own legal form and therefore continues to operate until it is dissolved or turned into a charity – and can benefit the community. Even if dissolved, a distinctive feature of CIC`s model is that all remaining assets (after payment by creditors) must be transferred to another entity subject to asset restrictions, such as another CIC or charity.