Saints Thomas IOW Community Interest Company Registered No. 06510032

This is a company, wholly owned by the Friends of Newport Minster, to act as the trading company for the Friends. It was incorporated from 20th February 2008, limited by guarantee and without shares. The first accounts were prepared for the period to 31st December 2008 and can be viewed on the Companies House website at www.companieshouse.gov.uk

What is a Community Interest Company (CIC)?

They are limited liability companies with the specific aim of providing benefit to a community. In trading terms, they can do anything a company can do and can engage in any lawful trade, activity, or enterprise.

If the CIC were to make a profit or surplus there are strict rules on what they may do with it. The profits or surpluses must be used to benefit the community rather than its members. They can pay directors, enter into contracts, sue or be sued. Our CIC is a private company limited by guarantee. In short, it is a business in a legal form tailor-made for social enterprises (a social enterprise is a business with a social purpose, operating in UK and abroad, delivering social and environmental changes).

A CIC has to comply with company law and adhere to the same levels of corporate governance as any other company in the UK. Their directors and members have the same rights and duties, have the same legal structure and are subject to the same tax regime.

All CICs have a statutory "asset lock", which is overseen by regulation. The asset lock is part of its constitution and cannot be removed. It is this that sets it apart from other companies, such as, a company limited by guarantee and puts it more on a par with charitable companies. The asset lock means that the CIC's assets can only be distributed for less than market value to another asset locked body, such as, the charity which owns the CIC.

The asset lock will not affect the ability of CICs to use their assets in the normal course of business. For instance, they will be able to use their assets as collateral for finance, and if they do so, the assets will be available to creditors in the event of default.

A CIC cannot have charitable status and therefore does not have a board of trustees. Compared to a charity the CIC has greater flexibility in terms of activities or trade and regulation is comparatively light touch. On the other hand there are no special tax advantages to becoming a CIC.

The Annual Community Interest Report provides transparency of operations. Anyone affected by the CIC's activities has access to its report on the public record, which is updated by the Registrar of Companies.

Once a community interest company is incorporated it will continue in existence unless it is dissolved. If the company is dissolved, any assets remaining after distribution will be transferred to another asset locked body, such as, the charity which owns the CIC to be used for a similar community purpose.

A community interest company has to file accounts and a community interest report annually. This report demonstrates how the CIC continues to provide benefit to a community through its activities. The accounts and report are placed on the public record providing transparency of operation. The report must include details of how activities have benefited the community; who was consulted and what was the outcome; what payments were made to directors; what assets were transferred; what dividends were paid, and what interest was paid on loans and debentures.

A community interest company is wound up under insolvency law in the same way as any other company. The only difference is that if there are any remaining distributable assets, after creditors claims have been met, they will be transferred to another asset locked body, such as a CIC or a charity.

Most enterprises will have relationships with banks and others, for the provision of loans and community interest companies should be no different. Any CICs, like other small businesses, are likely to need only simple funding services, such as an overdraft facility to smooth cash flow difficulties, or a mortgage, or loan, to finance an item of capital expenditure repayable, with interest (in a lump sum, or instalments over the period of the loan).

It is recognised that certain enterprises will need seed funding, and support during their lifetime if they are to succeed. The statutory asset must be taken into account when considering applications for funding.

Should you require any further information about community interest companies please contact the CIC Regulator on 029 2034 6228 or by emails at cicregulator@companieshouse.gov.uk or visit the website at www.cicregulator.gov.uk.