Setting up a social enterprise

Last updated: 31 July 2017

You must choose a business structure if you're starting a business that helps people or communities (a 'social enterprise').

If you want to set up a business that has social, charitable or community-based objectives, you can set up as a:

If you're setting up a small organisation like a sports club or a voluntary group and don't plan to make a profit, you can form an 'unincorporated association' instead of starting a business.

Community interest companies (CICs)

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

The CIC regulator has guidance on CICs, including the forms you need to set one up.

Mutuals

Co-operatives and registered societies (previously known as 'industrial and provident societies') are both types of mutual. A mutual is an organisation owned by, and run for, the benefit of its members.

Further help

The following organisations can give you further advice on setting up and running a social enterprise:

  • Social Enterprise UK - offer advice, case studies and guidance on business structures for social enterprises
  • Firstport - offer advice, training and funding for social enterprises
  • Social Enterprise Scotland - give advice on starting and funding a social enterprise
  • Senscot - create opportunities for social enterprises to network and provide legal advice through Senscot Legal
  • Social Firms Scotland - help social firms (a type of social enterprise) by giving advice, training and by running events
  • Just Enterprise - offer one-to-one advice sessions and training for start-ups and established social enterprises
  • Social Investment Scotland - help social enterprises by giving them interest free loans

You can also find out about legal forms for social enterprise.

And there are also opportunities to invest in local enterprise with community shares or to bid to run a local service.