A Social Enterprise is an enterprise with a social mission. The main aim is to make a difference, to help - and the Social Enterprise has plans and rules how to do it.
Choosing the right business structure is one of the most important decisions to make before starting a business that helps communities. In choosing the wrong structure the enterprise could end up paying more tax than it should, can incur personal liability or have an inappropriate structure for the outcomes it wants to achieve.
A business with charitable or community-oriented objectives can be established as a limited company, a co-operative, a charitable incorporated organisation, a Community Benefit Society, a sole trader or business partnership, or a Community Interest Company (CIC).
Community Interest Companies
The CIC is a special type of company limited by guarantee that has a constitution that specifies the social benefit for which it has been incorporated. As CICs have a benefit to the community they contain by law an asset lock value, a restriction on the transfer of assets out of the company except to another company with the same or similar objects.
If you want to set up a CIC you have to provide Companies House with your social benefit clause for approval by the CIC Regulator and articles of association. There are standard forms but The Brooke Consultancy (TBC) has a special format that gives Founder Members certain rights. The social benefit clause in the articles of association has to be approved by the CIC Regulator prior to incorporation and at the end of the year a social benefit report has to be filed with accounts.
You can choose to establish a company limited by guarantee or a company limited by shares. TBC favours the company limited by guarantee.
An example of an established CIC is TBC’s client MSH Health & Wellbeing in Islington. As the CIC is a Social Enterprise, it is able to bid for and obtain government contracts. In their case sexual health clinics. The trading company, called MSH Wellbeing Ltd, offers innovative therapies for the mind and body.
Justin Gaffney, CEO of MSH Wellbeing, speaks positively about his cooperation with TBC. “We value our relationship with The Brooke Consultancy, and trust them to provide the right advice and guidance on all our corporate governance and structural matters”. Visit MSH Wellbeing to receive more information about the services and various treatments.
Social entrepreneurship means to pursue innovative ideas with the potential to solve community problems and meet community needs. Social entrepreneurs create positive changes in society.
Sources: The Brooke Consultancy, Gov.uk, MSHwellbeing.co.uk