What is a CIC?
A CIC is a Community Interest Company – but what does this mean?
A Community Interest Company (CIC) is a special type of organisation that exists to benefit the community. A CIC could also be described as a “not for profit” company or “social enterprise”.
A key benefit of forming a CIC is having an “asset lock” put in place. This is a legal promise stating that the CIC’s assets will only be used for its objectives. Feast Week’s objectives are to fundraise for, and provide the community with, its annual Feast Week event. This “asset lock” is a key benefit to the community, providing protection, assurance and transparency around how Feast Week operates.
Being a CIC also makes it easier for organisations that Feast Week works with, such as banks and suppliers, to recognise that we are operating as a “not for profit” organisation. This status will allow Feast Week to benefit from arrangements specifically for these types of organisations, such as discounted pricing and reduced charges.
Is Feast Week now a ‘Company’?
Technically, yes: but this is a good thing! Becoming a community interest company means that the Feast Week organisation is a separate legal entity from the people who run it. This legal separation from the committee is a particularly important change.
A little known fact is that any members of an unincorporated organisation, however big or small (even as volunteers for a community event), are jointly and severally liable for the group’s activities.
However, when an organisation becomes a CIC the company itself becomes legally liable rather than the individuals who run or operate the organisation. Feast Week becoming a CIC means that the maximum personal liability for any Feast Week Committee member is now limited to £1. This is a significant benefit as it provides protection and reassurance for those members of our community who are involved with the organising and running of Feast Week.
Many of those on the current committee were concerned about personal liability when they joined. While this isn’t something anyone should have to consider when volunteering to help our community, this is the reality of the world we live in and to encourage future committee members to join, the committee wanted to remove this burden.
Why hasn’t this been done before?
The Feast Week committee has been considering whether to continue operating as an unincorporated association for some time. The committee has spent a significant amount of time researching the options and has consulted with those more experienced in these matters such as the Cambridge Council for Voluntary Service (CCVS). As part of this consultation, the committee considered and investigated whether it would be able to register as a charity. Unfortunately, although Feast Week is recognised as a not for profit organisation, it would not meet the Charity Commission’s criteria to gain charitable status.
The conclusion reached by the committee, in line with advice received, was that becoming a CIC was the best option for protecting and sustaining Hilton Feast Week.
Will Feast Week still be run by a Committee?
Yes and in addition, a CIC must have appointed directors. Those committee members that currently hold officer posts (Chair, Treasurer and Secretary) have volunteered to become the Feast Week CIC’s three directors.
Feast Week CIC has been set up so that the Directors delegate the running of the CIC to the wider committee as a whole. The committee will then function as before, with each committee member having an equal say.
Will the Directors be paid?
No. It has been expressly written into the Feast Week CIC governing documents that Directors cannot be paid. They can reclaim expenses if they have to buy something on behalf of Feast Week, as before, but they cannot receive any kind of pay.
Is a lot of paperwork required?
There was quite a bit of paperwork involved in setting up the CIC but the good news is that it is all done and does not need repeating!
While CICs are regulated by the CIC Regulator, this is comparatively ‘light touch’. The main requirement is the submission of an annual Community Interest Report (a short document with just two short sections of text that need completing by the committee each year).
Historically, the committee has prepared annual accounts and a report on activities for the Feast Week AGM each year, this will continue. Going forward as a CIC there will be a couple of extra forms to submit online annually but these are straightforward to complete and do not require specialist accountancy skills.
Rest assured that the current committee members have no plans to leave any time soon but a step-by-step guide is being written to help future committees with these annual tasks.
Is there additional cost involved in being a CIC?
There is a fee of £27 to set up the CIC which we have already paid. There is then an annual fee of £15 to file the Community Interest Report.
Will it mean changes to Feast Week as we know it?
There will be no change to the way the committee operates and there is no reason for the CIC status to impact the running of Feast Week.
Just to reassure our community: becoming a CIC will not require us to change the way in which we operate as a committee. Nor is there any requirement, or indeed plans, to change Feast Week itself.