On the bench at the moment - done a few contracts in the past via brolly companies, and now I'm interested in moving to a different model. In particular, I'm looking to form a Community Interest Company (CIC). I would expect that a significant portion (50 - 80%) of this company's turnover could be derived from contracts via agencies - the remainder coming from self-found services to local businesses.
The Department for Business Innovation & Skills' (BIS) own documentation seems to suggest that the CIC format is perfectly valid.
I have three main questions about this setup:
What are the reactions of agencies likely to be to this setup? More specifically, what reassurances are they likely to be looking for that a contractor acting through a CIC is (to them) no different to one acting through a (normal) Ltd?
Are any of the well regarded contractor accountancy firms likely to be able to be happy with such an arrangement? Or put another way, would I better trying to get a contractor accountancy firm to understand CICs, or an accountancy firm used to Social Enterprise / CICs to understand the nuances of contracting?
Any thoughts on whether would a CIC would be eligible for the FRS? I can't see why it would be any different to a normal Ltd, but Hector's terminology at HM Revenue & Customs is sufficiently wooly that some doubt has crept in. The one barrier I can see would be if the CIC's articles tied profits paid to one entity (say a specific chairty) under the 'associated' businesses rule, but that's not what I would be looking to do anyway.
First post on ContractorUK, so go easy please. Also, couldn't decide whether this should go in Business / Contracts or Accounting / Legal - whichever I'd chosen, somebody likely would have said it was in the wrong place. Apologies in advance if you find yourself reaching for the beta-blockers at my cavalier attitude to posting locations.
Much obliged for any help anybody can give,
TBSA
The Department for Business Innovation & Skills' (BIS) own documentation seems to suggest that the CIC format is perfectly valid.
Source: http://www.bis.gov.uk/assets/cicregu...ation-pack.pdf ; Highlighting my own
"In further examples the community may be the beneficiary of surpluses or profits of trading activities which may not themselves be specifically community benefit activities. Such CICs could have purposes described in terms such as:
Trading to create a surplus to assist...
Contracting to provide services and using surpluses from this for the benefit of...
This type of activity where the community benefit may be either from the activity itself or the profits of the activity (or both) are areas where the CIC format could be particularly suitable."
"In further examples the community may be the beneficiary of surpluses or profits of trading activities which may not themselves be specifically community benefit activities. Such CICs could have purposes described in terms such as:
Trading to create a surplus to assist...
Contracting to provide services and using surpluses from this for the benefit of...
This type of activity where the community benefit may be either from the activity itself or the profits of the activity (or both) are areas where the CIC format could be particularly suitable."
What are the reactions of agencies likely to be to this setup? More specifically, what reassurances are they likely to be looking for that a contractor acting through a CIC is (to them) no different to one acting through a (normal) Ltd?
Are any of the well regarded contractor accountancy firms likely to be able to be happy with such an arrangement? Or put another way, would I better trying to get a contractor accountancy firm to understand CICs, or an accountancy firm used to Social Enterprise / CICs to understand the nuances of contracting?
Any thoughts on whether would a CIC would be eligible for the FRS? I can't see why it would be any different to a normal Ltd, but Hector's terminology at HM Revenue & Customs is sufficiently wooly that some doubt has crept in. The one barrier I can see would be if the CIC's articles tied profits paid to one entity (say a specific chairty) under the 'associated' businesses rule, but that's not what I would be looking to do anyway.
First post on ContractorUK, so go easy please. Also, couldn't decide whether this should go in Business / Contracts or Accounting / Legal - whichever I'd chosen, somebody likely would have said it was in the wrong place. Apologies in advance if you find yourself reaching for the beta-blockers at my cavalier attitude to posting locations.
Much obliged for any help anybody can give,
TBSA
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