CIC Association

Serving Community Enterprise

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CIC Governance

This group is intended to help CIC's with how they are managed, led and held to account. 

Members: 54
Latest Activity: on Thursday

Discussion Forum

Directors as employees

I have been helping newly established CICs find funding and keep track of their bookkeeping.A number of them are now looking to make their voluntary work into a paying job.They do things like teach,…Continue

Started by Louise poor Aug 16.

Accounting Error 2 Replies

HiWe set up our CIC in June last year. We've been taking money for living expenses as drawings. I know now that this isn't the correct way to do things. I know we need to invoice as another entity or…Continue

Started by Wenderlynn. Last reply by Mahmood Reza Feb 23.

Registering additional directors for a CIC 5 Replies

Hello,I would very much appreciate feedback and guidance in relation to these no doubt seemingly simple queries that are cause for current concern. I set up a CIC limited by guarantee last December…Continue

Started by Daniel Wood. Last reply by Mark Trotter Feb 21.

Appointing a NED

Hello all,I am entering year of two running a CIC as the sole director, but with someone acting as the second bank signatory.I have now hit the age old problem of needing two or more directors to…Continue

Started by Ali Strow Sep 9, 2019.

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Comment by Louise Garner on Thursday

Thanks John - Indeed - I argued the case with the Lottery when they refused a Schedule 2 CIC - and they have accepted that and did change their guidance on A4A - I think most funders do know the difference and are happy with Schedule 2s - The issue is that people taking on Schedule 3 CICs THINK they are considered to be not for profits, but they arent - I think the model needs to be changed so it doesnt say they are not for profit.

Comment by John Mulkerrin on Thursday

simplistic interpretation is schedule 2 is not for profit and schedule 3 is for profit. Although a Schedule 3 can have rules to make share classes non dividend paying.

As you say A4A and many others explicitly exclude schedule 3 CICs as they have potential to distribute dividend, but in a wider sense Big Lottery are happy to fund schedule 3 CICs based on specific application details.

The funding environment for schedule 3 generally doesn't include grant funders immediately, its a very under developed area and a bit awkward as funders mostly support a company limited by guarantee legal structure

Comment by Louise Garner on Thursday

Hi - Schedule 3 CICs and Funding -  I work with social enterprises on legal structures and funding and assess a lot of funding applications. I frequently come across Schedule 3 CICs who (not unreasonably) think that they should fulfil funders criterias as "not for profit" but are rejected by funders, as they can pay dividends - Very often funders dont provide reasons and just reject at eligiblity stage. Many of them dont realise this is the case - and are confused as Clause 4 of the model document which is headed "not for profit", even though they are not "not for profit" in a way which would be accepted by HMRC, the Lottery, BBC Children in Need and others -  - I have written to the CIC regulator and been told - to paraphrase - there is no legal definition of not for profit and it is up to directors to determine if that clause is in their articles - In my view it is deeply misleading for most CIC directors who are not versed in the nuances of funding eligibility - I think it should be removed from the model docs - or at least explained - Has this been a problem for others? I have just had another group approach me who have been serially refused for funding and didnt understand why - They didnt know they could pay dividends and never have - 

Comment by Chris Bain on October 14, 2020 at 12:52

This is really helpful Charlie, thank you.

Comment by Charlie Cattell on October 13, 2020 at 12:07

There's standard phrasing to cater for virtual meeting - something like:

"Directors participate in a Directors’ meeting, or part of a Directors’ meeting, when—

a) the meeting has been called and takes place in accordance with the Articles, and

b) they can each communicate to the others any information or opinions they have on any particular item of the business of the meeting.

In determining whether Directors are participating in a Directors’ meeting, it is irrelevant where any Director is or how they communicate with each other.

If all the Directors participating in a meeting are not in the same place, they may decide that the meeting is to be treated as taking place wherever any of them is."

Comment by Chris Bain on October 13, 2020 at 11:28

We are looking to amend our rules on voting to reflect the need for our Board to meet in a virtual space. The current position (in accordance with Articles) appears to be that a virtual vote needs to be unanimous, whereas a vote in a "normal" meeting is by majority. How have others dealt with this?

Comment by Pete Scott on July 17, 2019 at 10:49

Hi - Sadly we have reached the point where we need to shut down our CIC. Such a shame. We trained in Social & Therapeutic Horticulture at Coventry Uni and have been using those skills to work with Older people / end of life since 2011. However the sector we have been working in has become increasingly fragmented and difficult and that, coupled with recent staff changes has lead us to this decision. Any signposting and guidance on how to close the business down would be most gratefully received. We have no assets worth speaking of and once we have paid off our Accountant for the final time - our business account will be empty. Thanks.

Comment by Claire Knox on December 12, 2018 at 14:06

Hi, we're in a process of change and we're saying goodbye to one director and appointing a new one at our AGM on Monday.  I'm currently looking at Forms AP01 and TM01 but I can not work out who has to sign them!  Is it the person being terminated or appointed or myself as a representative of the company?  Any advice greatly appreciated. Thanks

Comment by John Mulkerrin on February 22, 2018 at 17:35

Hi Allan

They usually mean your governing documents. They will want to see your Articles of Association and your CIC36 (your original documents you sent into the CIC Regulator for approval)

Best of luck

John

Comment by Allan Craig Muirhead on February 22, 2018 at 16:29
Sorry - post below refers to Heritage Lottery Fund, not the National Lottery Fund. Still appreciate any help, thanks.
 

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