A Limited Company set-up for the good of the community is deemed to be a Community Interest Company. Profits made by the business are reinvested for the benefit of the community.
Community Interest Companies are less strictly regulated than charities and have more flexibility in their operations. However, they need to fulfill the "community interest test" to show that they are carrying out business for the benefit of the community.
Why Start a Community Interest Company?
If you are planning to start a company which might benefit the community by the distribution of profit (e.g. charity shops) or active involvement in the community (e.g. day centres for the elderly or special needs) then a Community Interest Company is the perfect legal entity.
A Community Interest Company is simply a standard limited company carrying out a social activity. They are of great benefit to the community and the Country as a whole.
Benefiting The Community
A Community Interest Company is required by law to act in a way which benefits the community and not in a way which would solely benefit a single individual.
This is ensured by the use of specific company articles drafted during registration preventing any of the company assets or profits being used in a way which is not in accordance with this purpose.
Registering a Community Interest Company
Registering a Community Interest Company, you can use a company limited by guarantee, a private company limited by shares or a public limited company but there are legal necessities including:
Drafting of Asset Lock
Drafting of a Community Interest Statement
Satisfaction of the Community Interest Test
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