I am a director of a newly developed CIC that's still finding its feet and are looking to understand how to accept future invoices for work done.
Our work is based in mental health awareness and as part of our remit we go into schools, deliver workshops to both young people and teachers, as well as run a multimedia hub which trains young people.
A bit of background: We use to get paid on an individual basis from the organisation we did the work for. As all four of us were registered as sole traders we were able to invoice the folks at the NHS and get paid directly into our private accounts, but now we have formed into a CIC do we (legally) need to invoice for all future work through our CICs' new account or can payment still be processed into individual accounts (being sole traders)?
The new organisation we will be doing a fair amount of work for has sent us all 'Supplier Set Up forms' to get us on their system - but should we just send the forms back with our CICs account details and get all invoices processed through there instead?
Also Is this a legal issue or is it down to the board to decide reasonable remuneration of directors?
Hope that makes sense - Sorry if its a dumb question but It is a concern as some of the directors may want to invoice for work outside of the CIC and we want to be as transparent as possible.
We're a counselling CIC so here's what I know so far but I stand to be corrected.
I would firstly check with your solicitor and your accountants - if the work is being delivered by your CIC then the CIC should be invoicing for work done and you should either be receiving remuneration as a Director for the work you are delivering on behalf of the CIC or if anyone who is delivering work is not a Director you should decide if they are either employed by you or working as external consultants. This is a tricky area. Take advice.
In terms of Directors remuneration what does your Mem & Arts say?
Many thanks for your reply, Rachel - its very much appreciated (the team is having to figure out things as we go, as the person who knew CIC regs has left the org)
Also, believe it or not, we havent yet employed an accountant to work with us (as foolhardy as that may seem) but its something we are definately going to factor in, especially as a number of people may have to be paid out as external consultants.
In relation to our 'mem and arts' (new lingo im learning here!) - i think youre right, im going to have to double check the constitution and go from there. Thanks again
Glad to be of help it's a steep learning curve.
I would really recommend that you get a friendly solicitor to draw up the external consultancy contracts and an accountant, we wouldn't be without either. It's a worthwhile initial investment. We also got help from the Social Enterprise Network consultants in our county not sure if you have same where you are.
Thanks again for your invaluable advice - it's helped clarify a lot of questions we had with going forward as a CIC. We have found an accountant who specialises in CICs and from there we will look for further support - hopefully it will be a lot more plainer sailing from here on out, but boy, they dont make it easy do they!
Thanks again and all the best with your organisation!
We're happy to share more knowledge if you need it. Rachel