A social enterprise is a business that helps people or communities. It has a profit-making business model, but those profits are used to achieve social, charitable or community-based objectives. Because of the nature of the business social enterprises are often seen as a sustainable way to generate income for charitable causes.
Great information, resources and examples are available via Social Enterprise UK.
To set up a social enterprise you must choose a business legal structure such as a:
- limited company
- charity, or from 2013, a charitable incorporated organisation
- community interest company (CIC)
- sole trader or business partnership
Community Interest Companies (CIC)
A CIC is a special type of limited company which exists to benefit the community rather than private shareholders.
To set up a CIC, you need to apply to Companies House, and:
- include a ‘community interest statement’, explaining what your business plans to do
- create an ‘asset lock’- a legal promise stating that the company’s assets will only be used for its social objectives, and setting limits to the money it can pay to shareholders
- get your company approved by the community interest company regulator– your application will automatically be sent to them