Page 98 - Social Enterprise A New Business Paradigm for Thailand

compensation be deemed excessive, the CIC Regulator has the authority to intervene and enforce
corrective measures to ensure compensation is aligned with fair and proper standards.

(1.9) A CIC is required to prepare an annual report, which must include the following components:

• Financial statements
• A report detailing the activities carried out for community benefit
• A summary of stakeholder consultation or engagement efforts (In practice, this may be done
through simple means such as newsletters, stakeholder meetings, interactive websites, or
consultation documents issued prior to major decisions)
• Remuneration received by company directors
• Information about asset transfers, whether to another asset-locked body or at below-market
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value, provided the transfer serves a community benefit

(1.10) Upon the dissolution of a CIC, if any assets remain after settling the company’s debts, the
remaining assets may be distributed to the company’s members in proportion to their paid-up
share capital, but not exceeding that amount. If further assets still remain, they must be
transferred as directed by the CIC Regulator to an “asset-locked body” identified in the company’s
articles of association.

If no such asset-locked body is specified, or if the designated body is in the process of dissolution,
or if the CIC Regulator receives a request from a member or director asserting that the named

body is not suitable to receive the assets, and the Regulator agrees with the assessment, then the
Regulator may redirect the assets to one or more other appropriate asset-locked bodies as
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deemed appropriate.
In conclusion, the Community Interest Company (CIC) is a company structure particularly well-
suited for enterprises whose primary objective is to deliver community or societal benefit. This
purpose must be clearly stated in the CIC’s memorandum or articles of association. Registering as
a CIC is relatively straightforward compared to registering as a charitable organization. The legal
framework is flexible, allowing CICs to be established either as Companies Limited by Shares (CLS)

or Companies Limited by Guarantee (CLG). The CIC’s assets are protected through the asset lock,
which ensures that they are used for social purposes. Furthermore, the social mission embedded
in a CIC enhances its ability to attract funding and donations from supporters and funding
institutions. However, CICs do not receive any tax benefits and are subject to the same tax
obligations as other standard companies. This contrasts with registered charitable organizations,

38 The Community Interest Company Regulations 2005, Regulation 26.
39 Ibid, Regulation 23.
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