These are enterprises that use their profits for the benefit of the public, rather than shareholders or owners. The commitment follows widespread support for the idea when it went out to consultation.
Company Law minister Jacqui Smith said the DTI would press ahead with a bill to set up CICs "as soon as Parliamentary time allows". The legal changes will form part of the Companies Bill, which is expected to be introduced during 2004.
Voluntary sector minister Fiona Mactaggart said: "Community Interest Companies are an excellent example of how the government can help communities to help themselves.
"They offer a radically new way for organisations to pursue enterprise in the public interest, dedicating their profits to the public good, and creating real opportunities for people in areas where they are needed most."
Almost all of the government's proposals on the character of CICs were supported. They will have a 'lock' on profits but will be able to issue shares to allow for investment. However, dividends on those shares will be capped by a new CIC regulator.
Prospective CICs will have to pass an eligibility test set by the regulator and submit annual reports stating how they have met their social or community objectives. Campaigning organisations and political parties cannot become CICs. However, the government did make some changes to its original proposals in the light of the responses garnered from the voluntary and social enterprise sector.
Ministers agreed that CICs should be able to transfer assets to another CIC or a charity without having to demonstrate they are 'surplus'.
The government has also backed down on a proposal to introduce a statutory requirement for CICs to seek the views of their stakeholders. This was the most contentious proposal, with 43 per cent of respondents in favour and 32 per cent against. Acevo said the requirement "would run contrary to the 'light touch' regulation that the government intends for CICs, making them an unattractive option for social entrepreneurs".
NCVO backed the CIC concept as "a useful tool for organisations undertaking social enterprise activities", but warned that "CICs may be in competition with charities for grant-giving or philanthropic investment, or as recipients of companies' corporate social responsibility budgets".