Glossary · UK
What is Community Interest Company (CIC)?
A special type of limited company designed for social enterprises that use profits and assets for the public good.
Full Definition
A Community Interest Company (CIC) is a limited company structure created specifically for social enterprises -- businesses that trade for a social or community purpose rather than purely for private profit. A CIC is registered with Companies House like an ordinary limited company but must also satisfy the CIC Regulator that it passes a "community interest test" (its activities benefit the community), and it is legally locked by an "asset lock", which restricts how much profit can be distributed to shareholders and requires most assets and profit to be reinvested in the company's stated community purpose or transferred to another asset-locked body if the CIC is wound up. CICs can be limited by shares (allowing limited dividend payments to investors, subject to a cap) or limited by guarantee (typically used by not-for-profit bodies with no shareholders), and unlike a registered charity, a CIC does not receive charitable tax reliefs and pays Corporation Tax on its profits in the normal way, but it benefits from a simpler and faster set-up process than charity registration and more operating flexibility, such as being able to trade freely and pay reasonable staff salaries. CICs are commonly used for community businesses such as social cafes, community transport schemes, and local regeneration projects that want a recognisable, regulated social-purpose structure without becoming a full charity.