What C.I.C. stands for
If you’ve not come across the term C.I.C. before it stands for ‘Community Interest Company’. The best way to describe a community interest company is to think of it as a hybrid taking parts from a traditional limited company and rounding that off with parts from a charity.
Community interest companies were introduced in 2005 under the Companies (Audit, Investigations, and Community Enterprise) Act 2004, and you can get a great understanding of them on the dedicated Wikipedia page.
Other names for a community interest company that you might recognise are social enterprise, and non-profit.
Why we chose this format
A lot of people are often quite surprised when they find out we’re a C.I.C, because at heart we’re a technology company, which is a huge profit-based industry. It seems bizarre, and we absolutely get that. Ironically, that’s the exact reason why we chose it.
Technology has taken over the world and it isn’t going away anytime soon. We strongly believe that companies should create, develop and supply technology for a profit because it’s something that drives the modern economy.
However, when looking at sustainability and future-proofing for the economy, there are digital services that a community needs to access in order to not only thrive but actually survive. These services shouldn’t be driven by the bottom line, and a regular old limited company is far too susceptible to that temptation.
The obvious choice would therefore be to form as a charity to drive home the ethical and moral directives we want to remind ourselves of every day. Sadly charities are not dynamic organisations and essentially work with one hand tied behind their back in terms of how they can financially support themselves.
This makes them unsustainable and diverts much of their attention and focus towards sourcing funding. Furthermore they have an incredible amount of checks and balances on how they operate, which severely restricts their flexibility to adapt to modern trends and economic changes. A charity must have a board of trustees and they cannot be involved in the day-to-day running of the organisation, which creates a huge bottleneck.
We needed to find a middle ground, which took the best of both worlds and mixed them together. The C.I.C. offered that possibility in exactly the right blend, so that’s why we chose it.
What this means for us
There are a number of benefits and protection mechanisms for us as a C.I.C. Here are a few of the key ones that we think about every day.
- We can provide and sell services to individuals and businesses just like a limited company allowing us to be sustainable and profitable as an organisation.
- We are as flexible as a limited company, allowing us to adapt to social and economic changes quickly and efficiently, unlike a charity.
We are asset-locked like a charity, which means we’re not a tempting target for profit-driven investment no matter how appealing we might seem.
- Our directors and decision-makers can work for us as day-to-day employees, removing the bottleneck that charities suffer from, which makes us agile and dynamic when tackling problems.
What this means for you
As a member of the community we serve there are also benefits and protections for you as well. We’ve outlined the most relevant ones here.
- Our legal status as a C.I.C. requires that any services we offer must be for the benefit of our designated community.
- As an asset-locked organisation, we can only give or sell our assets to other asset-locked organisations, such as other C.I.Cs or charities. A limited company cannot buy one of the services we provide and then hike the prices to make a profit.
- We can receive donations from individuals and businesses, and these can sometimes be tax-deductible for you.
- We are not tax-exempt like a charity, so we cannot afford to engage in lax fiscal policies on how we spend revenue.