Community Interest Companies (CIC) are the newest form of limited company. A CIC is a hybrid of a standard shares company and a not for profit (limited by guarantee) company. A CIC does have shares but must be set up for the benefit of a community and will have an asset lock which either prevents or severely restricts dividends.
The CIC Regulator website provides full information about CICs at CIC Regulator.
There may be funding opportunities open to a CIC which are not available to a standard shares company. A CIC does not have special tax status and cannot register as a charity. Due to the inability to be able to pay dividends, a very small CIC can create additional national insurance liabilities compared to a similar standard shares company.
Industrial Provident Societies (IPS) are a convenient format that is used when shares are to be offered to the public. It is often easier and less costly to arrange with a solicitor to prepare a share offer for an IPS than for most other types of company.
An IPS is taxed largely as limited company, with some special rules around the taxation of distributions to members. An IPS must have its accounting date between 31 August and 31 January, unless it has permission from the FSA not to do so.
Green Accountancy work with many CIC and IPS companies. We understand the reasons for using such structures and have experience of working with the relevant regulators. Please contact us to discuss your situation and the services that we can provide.