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Starting a social enterprise as a Community Interest Company

When most people think of starting a social enterprise they focus on the community benefit and often assume that it will need to be established as a charity. While charities are a sound corporate vehicle for these activities, the rigours of the Charity Commission and charity law can be quite restrictive in nature.  

An alternative company structure, which is proving popular with many social entrepreneurs, is the Community Interest Company (CIC). These are seen as a popular alternative to a charity as the assets are protected and the business operates within a formally structured legal entity.

A focus on community benefit

The CIC is a corporate vehicle for a social enterprise to operate within and can be created to deliver a specific community benefit. What denotes a community benefit is quite a wide concept, capturing everything from amateur sports clubs and music groups, through to healthcare spinouts and renewable energy projects. The only notable restriction is that this structure cannot be used for a political aim.

DBA members can find out more about creating a CIC, the advantages and disadvantages of operating as a CIC and compliance requirements here.

Legal helpline for DBA members

hassan-ouajbir-515815-unsplashDBA members benefit from a free half hour of legal advice on any number of differing issues from the DBA’s legal partner Humphries Kirk. Please contact Darrell Stuart Smith at Humphries Kirk on 01305 251007, stating that you are a DBA member.

Not yet a DBA member?

If you’re not yet a DBA member and would like to benefit from the DBA’s legal helpline, as well as a wide range of other membership services and events, visit our website or call 020 7251 9229 to speak to our Head of Services, Adam Fennelow. 

Image credits: 

Francesco Gallarotti on Unsplash

Hassan OUAJBIR on Unsplash

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