Registered PLC - creating a separate CIC with same branding

Trelawny Mckenzie Founder at Outr Posted 4 months ago

Hi, I run an app called Outr that helps people discover local events and connect with others who share their interests. The very nature of the business is a community interest company; however, as a tech product, it must remain set up as private limited companyto ensure scalability and growth.

Through our work, we collaborate with, and promote events run by social enterprises, CICs and sometimes charities across London. I would like to explore the option of setting up a CIC called Outr Events that hosts and promotes community events using our existing network of organisations across London.

I do not want to change the structure of the main business, but I need to understand the possibility of a CIC arm or even a CIC with a similar name and branding that functions as its own separate entity.

Is this possible?

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Stuart Davis Staff PANEL

Consultant at Stuart Davis Group 3 months ago

Hi Trelawny,

This is really interesting.

Firstly [but probably unhelpfully] I'd poke at your first assumption here: does the current company have to stay as a Plc? Is it because you have investors who aren't looking for an exit yet, or that you couldn't persuade to go fully non-profit? Is it that you need further investment to grow? What is the barrier, and can this be overcome another way?

But you will know your business better than me. So, the second question is, does this need to be a separate CIC? Can you do socially good, non-profit things within the Plc wrapper? You could have a division or a segment for this, where you charge at cost. This would mean you can do things within your current branding, and it could be another angle for your marketing strategy. By clearly segmenting this, you should be able to keep most of your investors onside. Although having said that, those focussed purely on the bottom line may think this is a nice-to-have and a distraction.

So, if you go down the CIC route and separate out the work then you could potentially use the same branding. The CIC will need a slightly different legal name, but you can put together an MoU between the Plc and CIC to share branding and other internal services. Though it is important to say that the CIC would need to show that it is completely not-for-profit, so it couldn't be owned by the Plc - it would need to be a stand-alone entity.

Happy to have a chat if you'd like something more in-depth.

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Trelawny Mckenzie Staff PANEL

Founder at Outr 3 months ago

Hi Stuart Davis, this is an incredibly helpful answer! In aid of not clogging up everyone's feed with my lengthy answers to your questions, I will send you a private message :)

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