Community Interest Companies

A community interest company is a legal structure for social enterprises.

A community interest company is a normal company which has a community purpose at its heart. This purpose must meet the 'community interest test' which can include anything from climate change awareness and recycling to healthcare, childcare and local transport initiatives. It should not be primarily political in motivation.

A community interest company has an 'asset lock' which restricts the disposal of its assets. This means that all assets must be used for the community purpose or, if they are sold, open market value must be obtained for them and the proceeds used for the community purpose. It also has a 'dividend cap' which limits dividend payments to shareholders to ensure profits are applied to benefit the community. If the company is wound up, its assets must be transferred to another, similarly asset-locked body.