What is a Social Enterprise?
A social enterprise is not a legal structure but a way of doing business. The exact definition can vary, but in general they:
are focused on their mission and exist to tackle social or environmental issues set out in their governing document
re-invest the majority of their profits in pursuit of their mission
aim to get the majority of their income needed to operate from trade.
For more information on the definition of a social enterprise, read Social Enterprise Mark’s explanation of a social enterprise.
Find further information on governing documents.
Legal structures for a social enterprise
Social enterprises can take on many different legal structures. Some charities operate as social enterprises, so social enterprises can have a charity legal structure.
GOV.UK has more guidance on setting up a social enterprise.
A common legal structure for a non-charitable social enterprise is a Community Interest Company (CIC). A CIC is a special type of limited company which exists to benefit the community. It is not a charity.
The CIC regulator has guidance on setting up a CIC and a webinar to help you determine if this if the right model for you.
Other legal structures for a social enterprise include:
a private company limited by guarantee or shares
a cooperative society
a community benefit society
a charitable incorporated organisation (CIO)
a sole trader or business partnership.
Find out more about the characteristics of these different legal structures.
Learn about what to consider when choosing a legal structure.
Examples of social enterprises
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Belu Water
Belu is a social enterprise tackling the environmental impact of bottled water. They provide sustainable water solutions, including bottled water made from 100% recycled plastic or glass. Belu partners with WaterAid, donating 100% of its profits to provide clean water, decent toilets, and hygiene education globally.
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Green School
A revolutionary education project, Green School combines sustainability and holistic learning. The school is built from bamboo and operates off-grid, teaching students innovative approaches to living in harmony with the environment while empowering local communities.
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Change Please
This social enterprise empowers homeless individuals by training them as baristas. They run a network of coffee carts, offering sustainable, ethically sourced coffee. The initiative provides employment opportunities, housing assistance, and mental health support to help people transition out of homelessness.
Further guidance and advice
We suggest getting more information and seeking professional advice when setting up a social enterprise and choosing the right legal structure. Below are a few options for further guidance and affordable professional advice.
Guidance
Social Enterprise Mark CIC has a collection of webinars on setting up a social enterprise.
Social Enterprise UK has a guide to help you set up as a social enterprise.
GOV.UK has pages on setting up a social enterprise.
Advice
Interface Legal Advisory Service offers legal advice on setting up community interest companies and other voluntary structures. Advice is offered at a reasonable cost, suitable for those with a limited budget.