Commentary on Sections
Part 2: Community Interest Companies
Summary and background
Supervision by Regulator
Section 44 - Civil proceedings
244.This section gives the Regulator the right to bring a derivative action on behalf of a CIC. It is intended that the Regulator would use this power to bring court proceedings in the name of a CIC where the directors of a CIC fail to bring such proceedings, in a situation where it would be in the interests of the CIC or the community to bring those proceedings. For instance, the power will allow the Regulator to bring a claim in respect of a breach of duty by the directors themselves. The Regulator will have to reimburse the CIC for any costs it suffers as a result of the action (subsection (6)) and in return any costs awarded must be paid to the Regulator (subsection (7)).
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