Legal Structures Workshop

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INTRODUCTION TO SOCIAL ENTERPRISE
UDAY THAKKAR
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INTRODUCTION

• What is Social Enterprise?
• No legal definition
• Anyone can call themselves a social enterprise
  and many do

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GENERAL CHARECTERISTICS - 1

• Social Enterprises are businesses that trade in
  order to fulfil social aims.
• Thy bring together people and communities for
  economic development and social gain
• There are usually 3 common characteristics
• Enterprise oriented
• Social aims
• Social ownership - controversial

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GENERAL CHARECTERISTICS - 2

• Social Enterprises generate income through some
  form of trading or service delivery (Enterprise)
• Surpluses/profits generated are used for the
  benefit of the community (Social Aims)
• This could be that surpluses/profits are used
  directly for the community
• Or
• Reinvested in the business to grow it

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COMMERCIAL TRANSACTION
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S E TRANSACTION FLOW
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THINK AHEAD

• Stop and think
• What is it you are trying the achieve?
• Is it a short term or long term project?
• How do you see your own future involvement?
• How are you going to finance your project?
• Planning!!! Remember PPPPPP!

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Considerations

• Need to consider
• Ownership
• Personal liability
• Management/ Succession
• Transparency/ Governance
• Constitution
• Funding

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Company Limited by Guarantee - 1

• Most common structure for Social Enterprises
• No physical shares issued
• Do not pay to be a member
• Members give a guarantee instead, (1)
• Each member has only one vote
• Members can be individuals or organisations

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Company Limited by Guarantee - 2

• Have to request changes in objects so that
• No profit distribution by dividend
• Declare what happens to profits
• No asset distribution to members on dissolution
  (Asset Lock) specify who to
• Objects can be changed by special resolution
  75
• Governing principle is No personal gain

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Community Interest Company, (CIC) - 1

• Registration as a CIC commenced July 2005
  approx. over 1,500 now in existence
• Could be ltd. by shares or ltd. by guarantee
• Community interest statement need to satisfy
  regulator
• Community can mean employees
• Not a charity/ no tax advantages

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What you need to have in place

• A vision
• A mission what you do make your vision a
  reality
• A story to tell
• The resource requirements to support the story
• Someone in charge

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Mouth

• Do you have a story?
• What do your beneficiaries say about you?
• What do other people say about you?
• Does everyone in the organisation know this?
• Do you tell other people?
• Are you invisible?

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Organisation 1

• What do you do?
• Why do you do it?
• How do you do it?
• How do you measure it?
• How do you prove it?

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Money 1

• Why do you need the funding?
• Project
• Core
• Growth
• Survival

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Money 2

• How much do you need?
• What for?
• Capital
• Revenue
• What period does this cover?

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Business Plan (Suggested) Structure

• Executive Summary
• Services Demand
• Market Competition
• Marketing Sales
• Management Team
• Systems Organisation
• Implementation
• Opportunities Risk
• Financial Planning

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Searching for Grants

• Funder Finder
• Grantfinder
• Governmentfunding.org.uk
• Grantsonline.org.uk
• Fundraising.co.uk
• Dsc.org.uk
• Caf.org.uk

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LONG TERM

• Currently a lot of free support
• Many people jumping on the band wagon
• Will have to learn to pay for support
• Will have to work hard at being competitive not
  only commercial organisations but large charities
  and indifference poor knowledge from procurement
  officers
• BECOME SUSTAINABLE