Reply To: Community Interest Company

#162675
pwhitehead
Participant

Hello, I have one of these in our area and I was looking for a bit of advice, section 16 of A22/2008 states;

The HB/CTB Regulations 2006 define a voluntary organisation as ‘…a body, other than a public or local authority, the activities of which are carried on otherwise than for profit’ You should therefore ask to see a copy of their constitution or the rules that govern their activities and request a summary of their accounts to demonstrate their not-for-profit status. The common features of a voluntary organisation are that it

– is formally constituted

– does not formally or informally pay dividends or make profits from its operations or in selling, disposal or winding up of its assets or operations

– does not make payments to directors or any person, organisation or body connected to them which are quasi or disguised profits dividends from its operations or in selling, disposal or winding up of its assets or operations. Confirm these from their accounts

– does not have arrangements with any person, organisation or body, formally or informally to make payments or dividends, quasi dividends or disguised profits from its operations or in selling, disposal or winding up of its assets or operations

– that the objects of the organisation and its arrangements are such that it is not possible for any person, organisation or body to make a profit from its operations or in selling, disposal or winding up of its assets or operations

I have checked the Department for Business, Energy and Industrial Strategy's website for guidance as they're the regulator for CIC's, there's a document here; https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/605418/14-1089-community-interest-companies-chapter-6-the-asset-lock.pdf that seems to state that the dividend cap has been removed from 01.10.14, see section 6.3.

Would this mean that CIC's cannot be classed a voluntary organisation as per A22/2008?  Our provider isn't an RSL or registered charity.

Thanks in advance.