Social Enterprises come in all sorts of shapes and sizes, and therefore require specialist knowledge and understanding to enable them to thrive. It is important to ensure that your trading structure is appropriate to your aims and objectives, as social enterprises use a wide variety of legal forms.

These include:

• Community interest companies (CICs) – this type of entity was set up in The Companies Act 2006, and after a slow take up, they are beginning to be used more widely. This legal form was created specifically for social enterprises, for organisations that have a social objective. There is additional regulation for a CIC to ensure that the social objectives are met, and that its assets are protected. More information on CICs can be found by contacting the CIC regulator.

• Industrial and provident society (IPS) - many co-operatives and community benefit societies use this form of entity. They are democratically controlled by their members in order to ensure their involvement in the decisions of the organisation.
• Companies limited by guarantee – these are often used as a legal structure for companies with a social mission, which can be written into their Memorandum and Articles of Association. Companies limited by guarantee can also apply for charitable status if they meet the relevant criteria
• Companies limited by shares – these are, perhaps, the most flexible legal structure for business, and, whilst they are not regulated in the same way as a CIC, they can have a social aspect written into their Memorandum and Articles of Association.
• Charities – for those entities which have purely charitable objectives and meet the criteria for public benefit, charitable status may be appropriate. In these cases the tax breaks associated with charitable status can be an important factor.