CIC Association

Serving Community Enterprise

Mark Johnson has written an excellent and important piece on community share issues by CICs that deserves to be widely read by people involved in Share CICs.  It is very much in line with discussions I've had with the CIC Association - John Mulkerrin in particular.

One point - the view we have developed is that the route Mark suggests of proving common interest through membership of an unlimited company is not necessary in circumstances such as community shops and pubs - because the purpose (of the CIC and the finance) is already held in common.

Here's a bit of our own (draft) guidance...

A common interest group is an identified group of people who have an interest in common with each other in the affairs of the company and in what is done with the proceeds arising from any investment they make. It does not include people linked together and with the CIC only by virtue of normal business relationships – so your customers, for example, do not constitute a common interest group for these purposes simply by virtue of being customers, but a local community investing to save a vital local facility such as a village shop or pub, probably would be regarded as a common interest group.

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Replies to This Discussion

Geof,

Thanks for this, I plan on engaging fully on his website and encourage any readers to do so. Beyond it being an excellent article it is a very timely opportunity to discuss this more widely and in the round.  

Have you seen this Geof?   http://communityshares.co.uk/convert-a-community-interest-company-c...

Hi John,

I engaged with on Twitter on this - thought their reaction might be partly commercially driven!

There's also  bit of a debate in the Guardian Social Enterprise Linked-In Group.

There is a little band of advisers doing quite well out of the use of society structures for community share issues - interesting how it's largely these that seem to oppose the development of CIC community share issues...

Meant to ring you today but had a shed-load of work dumped on me... will try again tomorrow,

GEOF

Also not clear, having read their 'convert' page, how creating a CBS holding structure meets the legal requirement that societies must 'carry on an industry, business or trade' - normally it is not legally possible to use a society structure for a 'holding company'.

I wonder if they are in breach of this - or maybe they've actually split the operational activity between the two structures - awkward!

Hi Geof

I wrote to Jim Brown and Dave Boyle directly, as I said to Jim it is an excellent expression of the problem but unfortunately doesnt fully describe it. It could be that DCLG may have to confirm if it is their intention to exclude CICs from the world of Community Shares but I doubt that is the case or their intention. That there is misrepresentation hardwired into the system is I believe beyond dispute, whether it is wilful remains to be seen

I'll avoid commenting here too much on the specifics of that until I hear back but I do think it is very obvious there is enough concern and confusion to warrant immediate action. I also think it shows the timeliness of our recent suggestions.

More widely though, I think dramatic improvement in the situation can and will happen, how will be the question. 

Days away now (hopefully) from receiving EIS advance assurance for the first CIC share prospectus written with common interest group included. Thats another template sorted :-)

Vision and theory have clearly failed to change views, but example will win out. To PLC or NOT! to PLC....that dear boy is the question! lol

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