Hewitt proposes new 'not-for-profit' company
Trade and Industry secretary Patricia Hewitt has launched a consultation on a new form of not-for-profit Community Interest Company to act commercially 'working for the public benefit'.
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She said the aim was to cut the cost of setting up and financing social enterprises which improve the delivery of local services in areas such as childcare provision, social housing, leisure and community transport.
In a written Commons statement, she said a ‘key feature’ would be an assurance, guaranteed by an independent regulator, that profits and assets would be used to deliver the objectives of the company.
Investors would be able to trade in shares, but would have any dividends capped at some percentage point above base rate, or some other benchmark, and assets would be ‘locked in’ – though companies would be able to use them commercially.
CICs would come under the Companies Act and be required to produce annual reports and accounts and in addition ‘community interest reports’ to be scrutinised by the regulator, who would have power to act to protect the CIC brand such as the removal of directors or application to the courts for a wind-up order.
The regulator would act on complaints rather than engage in intrusive monitoring, she said.
Other details include provisions making shares tradable and banning political parties. Comments have to be in by Wednesday 18 June.