1 / 11

Community Interest Companies The Future for Ethical Business?

Community Interest Companies The Future for Ethical Business?. Gavin Smith Dublin 9 th November 2006. What is a CIC ?. New Type of Legal Entity in the UK Created in September 2005 Assets are ‘Locked-in’ Delivers ‘Community Benefit’ Has Shareholders and Limited Liability

janus
Download Presentation

Community Interest Companies The Future for Ethical Business?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Community Interest CompaniesThe Future for Ethical Business? Gavin Smith Dublin 9th November 2006

  2. What is a CIC ? • New Type of Legal Entity in the UK • Created in September 2005 • Assets are ‘Locked-in’ • Delivers ‘Community Benefit’ • Has Shareholders and Limited Liability • Has a regulator – John Hanlon www.cicregulator.gov.uk

  3. Who are the CICs ? • Care – Education – Local Transport - Health • Talentstar CIC - performance and media work experience • EQ Health CIC – psychotherapy for children using horses • SM Pride - Devon ‘Fetish group bids to join sector - sadomasochist group is one of the first organisations applying to become a community interest company’ Third Sector - September 14th 2005

  4. Benefits • Raise capital and Pay Dividends to investors • Annual Community Interest Report produced • Borrow more easily than Charities • Assets Distributed – to a CIC, or Charity only • 33 CICs registered by 1st November 2005

  5. Limitations • No tax advantages to the CIC or the Investor • Dividends are ‘capped’ • No asset appreciation for the Investor • Less control for the Investor • Social Business – seen as less professionally managed and more risky investment

  6. The Future for CICs ? • Investments made by UK taxpayers in CICs should attract full income tax relief Triodos Bank • CICs should be granted: • the same 80% relief on business rates • exemption from corporation tax • ability to give interest, or dividends, tax free to the investor Stephen Lloyd of Bates Wells Braithwaite

  7. The Evidence for Investment • UK Community Interest Tax Relief (CITR) • The model for future CIC development • Tax incentives for investments by individuals • Funds raised via banks & finance bodies Triodos Bank raised £3.8m from individual savers through CITR to lend to community groups – in 2 weeks

  8. The Children’s Scrapstore

  9. More Evidence… • The ‘Green Funds’ – Netherlands • Triodos manages €400m of funds for lending to environmental businesses • Other banks control similar funds • Volume of investment has been huge • Creating competition to lend to ‘green businesses’ The cost of funds to green businesses fell below European base rate for lending

  10. Conclusion • CIC’s provide a more flexible way for socially motivated organisations to operate • Tax incentives for investors in CIC’s could raise much needed development funds • CIC’s deserve similar tax breaks to charities • CIC’s are being set up by people with a genuine interest in community benefits

  11. Gavin Smith 00 44 (0)117 9809 743 gavin.smith@triodos.co.uk Triodos Bank Brunel House, 11 The Promenade, Bristol BS8 3NN www.triodos.co.uk

More Related