CIC Association

Serving Community Enterprise

Can anyone summarise the main financial differences for an investor between a limited company and a CIC limited by shares?

I know there is an asset lock- so any assets have to be sold for community use at the end- and there is a limit to the dividends that shareholders can take out of the company. 

Can you sell the company? What happens to IP from the company? 

Just getting my head around the issues that might deter potential investors.

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Hi Bridget

Main difference between limited by guarantee and shares in this regard is the potential to distribute a share of the profits through a dividend with the share CIC.

Yes you can sell the company, the shares of a CIC are outside the asset lock but obviously the value of the shares is affected by the asset lock.

IP is regarded as within the asset lock, so if sold the financial gain must be put forward to the stated community use

Thanks for this John.

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