Talk:Community interest company
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Cannot be an IPS
editWhat is IPS in this context? Looking at IPS I suppose it's an industrial and provident society but I don't want to change it as I'm not 100% sure. Mglovesfun (talk) 10:56, 18 July 2013 (UTC)
- You're right. They're not companies, although a company can convert to an IPS and vice versa. Since 2014 they have been known as "registered societies", rather than industrial and provident societies. OnceATeacher (talk) 09:40, 22 October 2023 (UTC)
Cannot be cooperatives
editCan CICs be cooperatives? I think probably not:
1) cooperatives are established for private benefit, not public or community benefit. The FCA will not register a coop as a community benefit society, for example, and 'section of the community' is defined so as to prevent a private group, however large, meeting the test. (CIC Regs 2005, rule 3)
- Unlike a co-operative society, a community benefit society should not exist to provide benefits contingent upon membership. We therefore do not generally regard co-operatives as meeting the condition for registration as a community benefit society. RFCCBS 5.1.5
2) distributions (such as those a cooperative would want to make) cannot be made by a CIC limited by guarantee at all, and in a CIC limited by shares distributions are in proportion to capital invested (as in a regular company), rather than work done or purchases made (as in a co-op) OnceATeacher (talk) 09:46, 22 October 2023 (UTC)
- After further research:
- TL;DR whether a CIC can be a co-op depends on which definition of co-op one uses.
- 1) Co-ops UK publishes two model governing documents for CICs that are also cooperatives. Unlike in a registered cooperative society, members' funds (ie, the co-op's surplus) cannot be distributed to members, but must be applied for community benefit - thus meeting the requirements of registration as a CIC. But it remains a co-op under the principles of the International Cooperative Alliance, because the precise application of the surplus is at the direction of the general meeting.
- 2) My account above of distributions in a company versus a co-op is too simplistic.