CIC or co-operative?

[Adrian Ashton]

there's a famous riddle that goes "what's the difference between a duck? - one of its feet is both the same" that I think helps to illustrate some of the confusion that exists about the differences or relationships between CICs and co-operative enterprises.

 

To my reading and listening, it seems that there's a general thinking that it's an either/or choice - you can't be a CIC and a co-op in the same way that you can't be a CIC and a charity.

 

However, to set the record straight - it is possible to be both a CIC and a co-operative (and there are a few out there that are);

the confusion perhaps arises because co-ops do not have to be incorprated within a specific single legal form - they are characterised by a set of defining values and principles (bit like social enterprise being defined by a set of defining features), and as such can be incoporated as companies, societies, partnerships, and in some instances even charities.

 

The main basis for any co-op is that it has a clearly identifiable base of membership (that's big 'M' members - the ones who the business is unltimately accountable to and controls it), and its run in their interests. So in a worker co-op, the business is owned by the employees who run it in what they believe will be their best long-term interests; in housing, members are the tenants; in consumer co-ops its the customers and so on...

 

With regard to the CIC Association (and there's a much more detailed discussion elsewhere on this forum about this), it may mean that as it moves to incorporate itself that a co-operative structure may be best fit - as such it would be structured as a 'consortia coop' with the Members being individual CIC enterprises who would each have a vote in how the organisation is run, and it focuses the Association on being directly accountable to them in turn. This would not only assure the Association of its purpose of acting in their interests by making itself legally accountable to CICs, but also strengthen its credibility when representing the interests of CICs to external bodies and others - its members/owners have legally delegated it to speak on their behalf.

 

there's more on co-op enterprises generally in lots of places such as co-operativesUK (the national apex body for the co-op movement) - http://www.uk.coop and there are also now regional co-op enterprise hubs that can offer specialist co-op developement support and advice http://www.co-operative.coop/enterprisehub/

 

 

 

Hopefully that's a useful initial 'primer' on co-ops in the context of CICs, but am happy to explore detail further if people would like to pose any specific or technical questions here.

 

 

Adrian Ashton

 

[John Mulkerrin]

well said Adrian, there's quite a few CIC Co-ops, or Co-op CICs popping up, at the end of the day it comes down to what suits best, whatever happens both have a big role to play over the next few years.

It'll be really interesting to see how this conversation develops, we're mostly on the same page I think, although we may not want to give members all the voting power, there's arguments to be had that something similar to a cafe direct voting structure might be more relevant, where other stakeholders are included in the process.

John

[Heidi Harris]

I think the confusion regarding CIC co-ops comes from the fact that a co-op that uses an IPS structure cannot have an asset lock, whereas CICs have to have an asset lock. A CIC co-op in reality is just a CIC with a large membership.