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Commercial build: Does anyone know anything about Community Interest Companies or Co-ops?

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  1.  
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      CommentAuthorKatymac
    • CommentTimeSep 6th 2007
     
    I'm sorry I know it isn't green building - but I wondered if anyone was involved in these sort of businesses?

    It's for my eco nursery (which maybe ressurected.....hopefully)
    •  
      CommentAuthornigel
    • CommentTimeSep 9th 2007
     
    Katymac

    See the attached link http://www.cicregulator.gov.uk/faq.shtml#two

    I am not sure it has any particular advantages to you and your nursery unless it enables you to access additional funding.

    A coop is a business owned and operated by its employees and again I am not sure how it will enable you to access additional funding.
    •  
      CommentAuthorKatymac
    • CommentTimeSep 9th 2007
     
    Bank (via small firm guarantee scheme) will lend over 10 yrs
    http://www.co-opandcommunityfinance.coop/ will lend over 20 yrs to a co-op (plus I don't pay 3% extra a year to the DTI)

    Which makes sense as we can't affor dthe loan over 10 yrs

    A CIC is a way of running a co-op (apparently) - but I'm struggling to understand how it works on a day-to-day basis
    •  
      CommentAuthornigel
    • CommentTimeSep 9th 2007
     
    From what I can see the capital and any reserves in a CIC are held in trust for the community whereas a coop holds them on behalf of the members/employees.

    If you are putting in your own capital then the CIC isnt a very good idea.
    •  
      CommentAuthorKatymac
    • CommentTimeSep 9th 2007
     
    My capital would effectively be a loan to the CIC and they could pay me back at up to 5% over base (that rate is capped) The actiual rate would be decided when the CIC/Co-op was set up and last the life of the 'loan'

    At least as I understand it
    • CommentAuthorSimonH
    • CommentTimeSep 20th 2007
     
    I always start out being altruistic and thinking I'll share profits as dividends etc etc. Then I realise that a co-operative everyone is a shareholder and can boot you out as chair/MD and elect their own :-(.

    A CIC has rules on how to split the profit. I.e you can pay yourself a directors wage, a good wage even, and other staff, but any business profits have to go back in for some good purpose and not be paid as dividends. The main benefit of a CIC over a regular ltd company is the easier access to grants. If you already qualified as a CIC then you've satisfied companies house on the purpose of the company is for some good of society. However funders will still want to check over you books in most cases.

    Ask yourself - why do I want a Co-op, CIC? If it to put the money to good use, then you can still do that by having a good CSR policy, and / or write contracts with people on how you'll distribute money - should you make any :-)

    I've been looking at starting several businesses lately - all around eco themes, and you kind of feel you should be a co-op or CIC. I've come the conclusion that profit needn't be a dirty word! Keeping control is more important.

    Simon
    •  
      CommentAuthorKatymac
    • CommentTimeSep 20th 2007
     
    Well it's all about the difference with a loan over 10 yrs or over 20yrs - it makes it much more viable
  8.  
    Katymac

    any further with your coop plans.

    I am in the middle of purchasing a victorian market hall which will be a blank canvas as my main operation will be a CHP unit in the building next door heating the market hall. I am into renewables and ethical trading and was wondering whether the market hall would be better set up as some form of coop. The building has 8 former retail units and space for 9 craft units on the ground floor and 10 display units on the mezzanine floor with balcony. The central area of the building has to remain open so continental tables and chairs was envisaged with a wine bar/restaurant on one side and a pub/cafe on the other.The other alternative would be a standard tenant and landlord arrangement but that seems to defeat the object of a working community. Any suggestions
    •  
      CommentAuthorKatymac
    • CommentTimeMar 13th 2008
     
    We are now a Co-op!!!

    Just waiting for the paperwork

    & already 1 argument:cry:

    I wanted a computer to use for the business & asked 2 of the directors who said yes (which plus me made 3) - told 4th next day that I had bought one & they went off in a huff - so not an ideal start

    I know lots of craft/art communities work as a co-op

    Sorry not to offer more help - I'm on a near verticle learning curve atm
  10.  
    I worked for what started as a workers' collective for nearly 20 years. A lot changed in that time and a lot of themes repeated themselves. Try me via www.syec.co.uk if you want more info.

    Nick

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