Structure
Formal Structure:
The particular structure adopted is designed for use by private companies limited by guarantee, which have more members than they have directors. Although it assumes that the directors (and, in time, employees) will take most day to day decisions about the company’s business, it also gives the members a strong role in controlling the overall governance of the company.
Essentially, it solidifies the concept of democracy into the organisation's management and structure. It keeps the organisation open and enhances the opportunity for community involvement. It also allows the flexibility to enable the organisation to grow with both it's users and the wider community.
The guarantee means that every Member of the Company undertakes to contribute a sum not exceeding £1 to the assets of the Company if it is wound up. This will provide for payment of the debts and liabilities of the Company and for the costs, charges and expenses of winding up.
As noted above, the directors are responsible for managing the company's business. Any decision which the Directors take (as a group) must be either a unanimous or a majority decision. A simple majority will be sufficient to make most decisions, and in the event of an equality of votes the Chair will have a second or deciding vote.
However, the Members may, by special resolution, alter the scope of the Directors’ functions or require the Directors to act in a specified manner. In addition, all directors will stand down at the first AGM and elections will take place among members. Members also have the power to appoint directors by ordinary resolution. This power ensures that the organisation will continue to operate in the manner and direction favoured by its members.
The asset lock provisions inherent in the CIC model give confidence to those wishing to fund the company that the assets and profits will be devoted to the benefit of the community. While the CIC annual report ensures transparency and that those affected by and benefiting from the CIC’s activities are properly recognised as stakeholders.
The community interest statement shows how activities will be for the benefit of the community and how this will be achieved. The community interest test, " whether a reasonable person might consider the CIC’s activities are carried on for the benefit of the community" has to be passed and is overseen by the CIC Regulator to ensure continued adherence to approved objectives.