Setting up a social enterprise

Last updated: 4 December 2017

'Social enterprises' are businesses set up to help with a common good. For example, they can help:

  • with a social need - for example providing health or social care
  • strengthen a community - for example running a community centre
  • improve people's life chances - for example creating opportunities to learn skills
  • to protect the environment

You can set up a social enterprise 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.

Co-operatives

A 'co-operative' is an organisation owned by its members. And run for their benefit.

Co-operatives can be:

  • employee-owned businesses
  • collaborations between businesses
  • community co-operatives

You can find more information on setting up a co-operative in Scotland on the Scottish Enterprise website.

Further help

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

  • 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.