Social enterprises use a variety of legal structures to help them achieve their aims and can take a number of different forms including:
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Co-operatives - owned by, and operating for the benefit of, their members, customers or workers. |
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Credit Unions - savings and loans co-operatives. |
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Social firms & social co-operatives - providing employment, training and other forms of support for those most disadvantaged in the labour market. |
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Community businesses / community enterprises - trading enterprises, often operating within a distinct geographic locality or community of interest, which are owned and managed by local community volunteers. |
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Development Trusts - often owning and developing assets, such as buildings or land, on behalf of a local community. |
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Trading arms of charities, voluntary organisations and community groups - providing goods or services that benefit local people and earn income. |
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Employee-owned businesses - enterprises that are owned by their workforce. |
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Larger mutuals or ‘mutual societies'- operating for the benefit of their members. |
In addition, in 2005 the Government launched a new legal form for social enterprises called the Community Interest Company (CIC). This is intended to complement existing legal forms widely used in the sector - such as the Company Limited by Guarantee or Shares, and the Industrial & Provident Society - while also including some special features that offer greater transparency and credibility.
These include:
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A statutory 'lock' on the assets and profits of CICs, which means that they cannot be ‘de-mutualised’ |
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A 'community interest test' which companies must pass in order to be registered |
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An annual report explaining how the company’s activities have benefited the community and how they are involving their stakeholders; The CIC is also a regulated form, with a national regulator responsible for ensuring that they comply with their legal requirements. |
Since launching, over 300 enterprises have registered as, or converted to, Community Interest Companies.The Office of the CICs Regulator is here: www.cicregulator.gov.uk
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