Wind&Bones has recently set up as a CIC, or a Community Interest Company registered in the United Kingdom. Since we’ve done so, we’ve had a lot of people asking us questions about what a CIC is, and how it works. We’ve also had quite a few people who are running projects of their own asking about how easy it is to set up their own CIC.
Now. We are timid writer-types. We like reading and books and things. We scare easily when faced by bureaucracy. We’ve read Kafka: paperwork makes us tremble. So if you are confused and alarmed, don’t worry. You are in good company. But we are here to tell you some good news. Setting up a CIC is very easy.
So here’s our friendly outline of how it works, and why we think setting up as a Community Interest Company is a CIC-ass idea for other small UK-based organisations working for social change.
What Is A CIC?
The clue is in the name. A CIC is a limited company. It is a business. But it is a business that exists primarily to benefit the wider community, rather than to benefit its shareholders. In fact, many CICs don’t have shareholders (ours doesn’t). So all surpluses are ploughed back into working for the good of the community. And if the business folds, its assets are used for the social good. This is called the ‘asset lock’ — we’ll get to this in a bit.
In other words, a CIC is a kind of social enterprise.
Why Did We Set Up A CIC?
Since we founded Wind&Bones a couple of years back, things have grown fast. We realised some time ago that we needed a more formal structure for our work, we looked around for the best structure to suit what we do
We were clear that we didn’t want to set up as a standard limited company. It just felt wrong. We didn’t want the focus to be on profit, or on shareholders. We wanted to keep our minds focussed on what we do, and on the broader benefit of what we do. Making a living is important to us. It is important to all artists. But our ideal is to make a living doing something that is of broad social benefit. So we wanted this broad social benefit to be at the centre of how we thought about what we did.
Another option would have been to set up as a charity. But we’re a small outfit. Charitable status was too complex and cumbersome for our needs. And besides, in many of the things we do—running public classes, publishing books, and so on—we function more as a business than a charity.
So we settled on a CIC: a limited company that exists to serve the public good. Having this status allows us to keep focussed on the questions that matter to us. Questions like: How is what we are doing of benefit to the community? How can we extend this benefit? How can we make our work meaningful and beneficial?
That Sounds Great… But Isn’t It Nightmarishly Complicated?
We put off setting up a CIC for quite a few months, because of precisely this fear. As we said, we’re timid writer types. But the good news is that setting up a CIC is easy. The best place to start is by going to the setting up a social enterprise page on the government website. For a government web-page, it is surprisingly friendly.
Community Interest Companies are overseen by the office of the CIC Regulator. When you sign up, you can download the forms you need. Then you submit them all online. No standing in queues. No waiting on chairs in corridors for somebody to come back from lunch. You can even apply in your pyjamas.
These are the things that you need to apply. They are all pretty straightforward…
A Community Interest Statement
Basically, this is a form you fill in to say how what you are planning will benefit the community.
It’s dead easy to fill in. You just have to say in general terms how you aim to work for the benefit of the community, and then break this down in a bit of detail.
Essentially, this is a long, legal document setting out how you will operate.
Fortunately, the website has templates you can modify, so you don’t need to be a lawyer, or to hire one. You just need to take time to read the stuff carefully, and fill in the gaps (which are marked by square brackets).
An Asset Lock
This bit confused us at first. But it is quite easy, and it is one of the real benefits of a CIC.
Basically, the asset lock is a way of ‘locking in’ the assets of your CIC, so that they are used for the public good, even if the company itself dissolves.
Okay, I’m Still Confused. Tell Me More About This Asset Lock Thing
We empathise. It confused us as well. Think of it like this. If you cease trading, what happens to all of your assets (the money in the bank, the limousines, the glass-fronted office buildings on Canary Wharf)? If you are a CIC, then you can nominate an ‘asset-locked body’. This is another organisation also working for broad social benefit to whom all your assets go in case of the company ceasing trading.
We don’t have limousines or glass-fronted offices yet. And if we did, our claims to be working for the community benefit might be looking a bit spurious. But we’ve put down English PEN as our asset-locked body. This means that if we cease trading, our assets go to supporting their brilliant work.
You can nominate any other CIC, charity or socially-beneficial organisation as an asset-locked body. You don’t need to ask them. They just need to be an appropriate body. Think of the asset-lock as a kind of company Last Will and Testament (‘In the event of the death of Wind&Bones, I nominate…’)
I’m In… But Doesn’t It Take Ages and Cost a Fortune?
Great! When we started on this process, we were expecting months of complex paperwork. But the good news is this: it is very quick to set up a CIC.
It took us a day to read the paperwork, decide on an asset-locked body, and complete the community interest statement and constitution. Then we emailed it all off to the regulator’s office. After this, we trembled a bit, and uttered various silent prayers to the Gods of Bureaucracy.
We got an approval email the following day. Or perhaps two days later. We can’t remember. Anyway, it was very quick.
As for the cost, at the time of writing, it is £27.
Setting up as a CIC has been quick and painless. It has also had all kinds of benefits. It means that we have a formal structure, and this makes it much easier to work on projects with other organisations. We can now invoice as Wind&Bones, rather than as individual private contractors.
The process has also helped us think more clearly about what we are doing with Wind&Bones, about our aims and our future direction. It has helped up highlight again the social aims of the business. And finally, it has given our work a much stronger foundation, so that we can continue to do the things that we love.
We hope that this blog post is useful. If you are running a project that works for the social good, and if you are based in the UK, then it’s really worth considering setting up a CIC. Get in touch with us if you want to say hello or chat more about our experience.