Community Interest Company
f you want to use your private practice to help the community, you may want to consider setting up as a Community Interest Company (CIC).
What is a Community Interest Company?
CICs are often described as social enterprise. They are limited companies, which means you are protected against liability for business debts. However, there are rules in place to make sure that the community comes before profit.
The key facts about Community Interest Companies
- they can be anything from a small private practice to a multimillion pound organisation
- they are set up as a Limited Company
- there are no constraints against growth (unlike charities)
- they may pay their Directors a salary
- they may give their Directors dividends (capped at a specified amount)
- when registering, you will need to provide Companies House with a community interest statement, explaining the social purpose of your private practice
- CICs must have an asset lock, meaning that profits or assets cannot be transferred – they must be used for the good of the community
Should I set up my private practice as a CIC?
If your main motivation is helping the community and driving any profits back into your work, you should consider it. CIC status will raise the profile of your private practice, generating plenty of goodwill.
CICs are less strictly regulated than charities and you are protected against business debts. However, profits must be retained for the good of the community, even if the business is wound up.
What to do next
- If you are considering setting up your private practice as a CIC, the next step is to talk to your accountant. You will need a clear idea of how this will affect your finances and the future of the practice.
- Visit http://www.bis.gov.uk/cicregulator to find out more.