CIC Association

Serving Community Enterprise

Marked for success or more confusion (or... is it better to be CIC'd or Mark'd?)

One of the principle aims of the CIC was as an easy identifier for social enterprises, but this seems not to have happened in the way people hoped – perhaps because as a legal form CICs offer no features that are inherently unique (i.e. protected asset locks and principle purposes can be entrenched in other legal forms, although they are regulated and managed in different ways).

But we now have the shiny new Social Enterprise Mark, which will hopefully have a better chance of being the easy identifier as it’s based on recognising defining characteristics of social enterprise in whatever legal form or structured they are enshrined.

BUT... will this Mark spark a new market for ‘marks’? The Soil Association and FairTrade Foundation were both pioneers in certifying organic and fairly traded goods, but other organisations offering organic and fair trade certifications have since emerged...

So perhaps we should be more open to the other ‘marks’ that are available to social enterprises to seek (the Social Firms Star for instance), and welcome others’ attempts to introduce other standards (there’s moves for a worker co-op mark, and Scotland did look at having its own mark as well) and explore how they might best complement each other.

Ultimately though, the Social Enterprise Mark shouldn’t be a holy grail, but one of a number of tools that we should approach and consider its appropriateness to us in the context of our enterprises’ own needs and marketplaces. Some will take the mark and use it to great commercial advantage I’m sure, while for others it simply won’t be relevant...

 

 

links to references -

http://thirdsectorexpert.blogspot.com/2010/06/marked-for-success-or...

social enterprise characteristics: http://www.top10tips.co.uk/uk/small-business/pre-start-up/social-enterprise-get-it-right.php

Social Firms Star Mark: http://www.starsocialfirms.co.uk/

Social Enterprise Mark: http://www.socialenterprisemark.org.uk/

http://www.cicregulator.gov.uk/

'holy grail' http://en.wikipedia.org/wiki/Monty_Python_and_the_Holy_Grail

Scotland's almost social enterprise mark: http://regenandrenewal.blogspot.com/2010/03/senscot-eyes-scottish-social-enterprise.html

 

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The dividend cap, the community interest test, the regulator to mention just a few?

CIC was brought about because there was a clear need for an easily identifiable, and useable, legal structure. It wasnt designed to make social enterprise easily identifiable, we cant even seem to agree what is or isnt a social enterprise! Thats a whole different issue, as im just about to rush off for an early beer and catch some sun i'll leave that for another day!

A CIC is a regulated social business.

A CIC can be incorporated by an individual, who wants to be able to develop and retain control of their own social mission.

A CIC is a uniform legal structure that can be recognised, for eg, to build uniform pathways for investors, an inportant element in the wider ambition of transitioning social enterprise into the mainstream, and building capacity with the Third Sector.

I understand what your saying about identifiers, but CIC is quite a lot more than that, you could make the same argument that Co-ops arent inherently unique, but im sure you wouldnt compare them to the Social Enterprise Mark or a FairTrade badge.

Now you know im not saying that CIC isnt a problem free zone, but for me the problem is information dissemination, Social Enterprise was given a shiny new toy 5 years ago and instead of using it like a secret weapon its just kept it a secret.

Here's one for you Adrian, whats the differences between a CIC and a Co-op? Will you help me build a contrast sheet on here?

best regards
John
the difference between a CIC and a co-op? easy: its not a valid question as its not an either/or choice - there are some co-ops that have adopted CIC status, and others that feel an alternative structure is more suited to them.

the challenge is that there is no single overarching legal definition of a co-operative enterprise, and as such it can be incoprated in all sorts of ways - Societies (x2 flavours), Partnerships (x2 flavours), CLS, CLG, charity (in some uncommon circumstances), and as the CIC is not a stand alone structure, some co-ops using the company route have also elected to go the 'extra mile' and gain CIC status as well (-something I struggled to get my head around until the regulator removed the mandatory clauses on unequal voting in the CIC legislation).



Just to pick up a few of yoru responses to share my experince and perceptions in hope of clarifying where I'm 'coming from' (and that I do usually think about what I say before I say it, especially when I know it may be a tad contentious)...

In terms of my comments about CICs being an identifier - this is based on the requirement that any CIC include the words 'community interest company' or 'cic' in its trading name and all stationary and publicity in order to visibly identify it as a form of social enterprise (something that a few CICs don't seem to be doing...)

in terms of a CIC being able to be incoroprated by an individual - yes, that's true now, but wasn't when the CIC first came into being, it can be now be formed with only 1 person only due to wider recent changes in company law;

is a CIC a uniform legal structure? well, it can come in 3 flavours (CLG, CLS, plc), and within their articles there can be a lot of leeway with regard to their governance and accountability...

the aspects of CICs defining characteristics being unique - community benefit societies and charities also have to pass a form of public/community benefit test; the dividend cap is also a feature of community benefit societies; although I'll grant you the one on the regulator - the CIC regulator is the most powerful of all regulatory bodies (more so than the FSA, although so far also the one with the least published guidance on how they'll use them to enforce the rules?).


Anyways - going back to your closing question and my opening comments, wanna start up a seperate thread to explore the CIC/Co-op relationship? I know of a few other people who'd be interested to contribute.

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