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Benefits of Setting Up a Community Interest Company C.I.C

 

A Community Interest Company (CIC) is a unique business structure designed for social enterprises that prioritise community benefit over private profit. Here are the key advantages of choosing a CIC


Directors Can Earn a Salary

  • Paid Leadership: Unlike traditional charities (where trustees are often unpaid), CIC directors can receive a fair salary for their work, making it easier to attract skilled professionals.

  • Flexibility: Set salaries based on market rates, ensuring your team is compensated while staying focused on your social mission.


Access to Grants & Funding

CICs are eligible for exclusive funding pots unavailable to standard limited companies, including:

  • The National Lottery Community Fund (grants up to £10k–£500k+).

  • Arts Council England (funding for creative and cultural projects).

  • Heritage Fund (grants to preserve UK heritage).

  • Social Investment Tax Relief (SITR): Tax incentives for investors backing your CIC.

  • Local Authority Grants: Many councils prioritise CICs for community projects.

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Flexibility to Grow & Diversify

  • Trade Freely: Unlike charities, CICs can engage in commercial activities (e.g., selling products/services) to fund their mission.

  • Balance Purpose & Profit: Reinvest earnings into community projects while maintaining financial sustainability.

 

Attract Ethical Investment

  • Capped Dividends: Offer investors limited returns (up to 35% of profits), aligning profit with purpose.

  • Social Impact Focus: Appeal to impact investors seeking measurable community outcomes.

 

Tax Advantages

  • Business Rate Relief: Some CICs qualify for up to 80% rate reductions.

  • Grant Income: Unlike standard companies, grants to CICs are typically not taxable.

 

Limited Liability Protection

  • Personal Asset Protection: Directors’ personal finances are shielded if the CIC faces debts or legal issues (similar to a standard limited company).

 

Simplified Governance

  • No Charity Commission Oversight: Less bureaucracy than charities, with reporting tailored to social enterprises.

  • Annual CIC Report: Demonstrate transparency and impact to stakeholders.

 

Community Focus

  • Legally Bound to Social Good: Your CIC must pass a “Community Interest Test” and prove its activities benefit the public.

 

Scalability

  • Expand Reach: Use profits to grow your impact, hire staff, or launch new projects.

  • Collaborate Easily: Partner with charities, councils, and businesses as a trusted social enterprise.


Why Choose a CIC?

  • Ideal if you want to earn a salary while driving social change.

  • Perfect for projects needing grant funding or aiming to blend profit with purpose.

  • Combines the flexibility of a business with the ethos of a charity.


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