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Ruth Wallsgrove - 02 Mar 2018
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It is clear the simplest legal framework that will support grant applications is a Community Interest Company, Company Limited by Guarantee (CIC CLG). Legal co-operatives and charities are both much harder and more restricted.

For anyone not already familiar with this legal format, Limited by Guarantee allows ‘guarantors’ rather than shareholders – and in any case it restricts what can be done with ownership of the company, to be handed on at dissolution to another organization sharing the same aims. (In other words, no shareholders who can sell it off to anyone, and so essentially non-capitalist in the strict meaning of the term capitalism!) The guarantors each have to guarantee at least £1…in the event of the company going bankrupt. So it is extremely limited liability, which is the original point of having a registered company.

To apply for grants under this legal format, we will need 2 signatories on accounts, the management committee must include 3 unrelated members, a bank account needs to be open and the organisation must be constituted – which in our proposed model will be as a CIC CLG.

I was taught to keep the Articles of Association non-restrictive in what kind of activities it can carry out; Manda has a model set we can reuse.  Articles really are not very interesting, being more about what to do in the event of dissolution and voting off Directors than anything, and so my feeling has always been that what CC CIC is all about is described in a separate document not registered with Companies House.

My suggestion is also that we view CC CIC version 1.0 as an interim model, to be evolved in time to a more developed membership organisation, where some group of people defined as members – not necessarily just through paying their annual fee – have a formal say in the management of CC. This will take time, and needs to be carefully worked out.

A CIC itself does not have to be a collaboration. However, it seems to me that the whole point of CC is to develop and extend what it means to collaborate, in all its messy glory. CC CIC 1.0, however we exactly constitute it, is a step by CC towards more formal collaboration, and even with a limited set of company officers/ guarantors (these don’t have to be the same people), needs to start this journey.

To protect Pete’s investment in very significant time and money in the CC website, it is proposed that Pete’s current company rents its use to CC CIC 1.0 for twelve months. I suggest that the monthly service charge is raised as part of another grant proposal – a perfectly reasonable administrative/IT fee supporting, for example, a funded project to support the development of Beacons.

REW, 24/2/18.

 

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