LEGAL STRUCTURES FOR SOCIAL ENTERPRISE AT A GLANCE
This is a rough guide to the legal structures most commonly associated with social enterprise and other company forms.
Legal structure
Unincorporated
association
Trust
Limited company
(other than Community
Interest Company)
www.companieshouse.gov.uk
Community interest
company (CIC)
www.cicregulator.gov.uk
Industrial & Provident
Society (IPS)
(Co-operative)
http://www.fsa.gov.uk/pages/
doing/small_firms/msr/societi
es/index.shtml
Industrial & Provident
Society (IPS)
(Community Benefit
Society (BenComm))
Charitable Incorporated
Organisation
http://www.charity-
commission.gov.uk/registratio
n/charcio.asp
Summary: most Ownership, Is it a legal person Can its activities Assets 'locked Can it be a Differences in the
typical features governance and distinct from benefit those who in' for charity and get law as it applies in
constitution those who own own and/or run it? community charitable status Scotland or
and/or run it? benefit? tax benefits? Northern Ireland?
Informal; no general Nobody owns - No, which can Depends on own Would need Yes, if it meets the No specific
regulation of this governed according create problems for rules. bespoke drafting criteria for being a differences.
structure; need to to own rules. contracts, holding to achieve this. charity.
make own rules. property and liability
of members.
A way of holding Assets owned by No, which means Not usually. Yes, if trust Yes, if it meets the No, subject to
assets so as to trustees and the trustees are Trustees/directors established for criteria for being a differences between
separate legal managed in interests personally liable. can only benefit if community charity. English and Scots
ownership from of beneficiaries on trust, court or Charity benefit. trust law.
economic interest. the terms of the trust. Commission give
permission.
Most frequently Directors manage Yes, members' Yes, but no dividends Would need Yes, if it meets the Scotland: no.
adopted corporate business on behalf of liability limited to etc to members if it is bespoke drafting criteria for being a Northern Ireland:
legal structure; can members. amount unpaid on a company limited by in articles, which charity. separate but similar
be adapted to suit Considerable shares or by guarantee. could be legislation.
most purposes. flexibility over internal guarantee amended by
rules. members.
'Off-the-peg' limited As for other limited Yes, members' Yes, but must benefit Yes, through No, but can Scotland: no.
company structure for companies, but liability limited to wider community as standard become a charity if Northern Ireland:
social enterprise with subject to additional amount unpaid on well. Can pay limited provisions which it ceases to be a legislation not yet in
secure 'asset lock' regulation to ensure shares or by dividends to private all CICs must CIC. place.
and focus on community benefits. guarantee. investors. include in their
community benefit. constitutions.
For bona fide co- Committee / officers Yes, members Yes, but should do so Would need No, would have to Scotland: no.
operatives that serve manage on behalf of liability limited to mostly by members bespoke drafting be constituted as Northern Ireland:
members’ interests members. One amount unpaid on trading with society, in articles, which community benefit separate but similar
by trading with them member, one vote shares. using its facilities etc, could be type of IPS. legislation.
or otherwise (regardless of size of not as a result of amended by
supplying them with respective shareholdings. members.
goods or services. shareholdings).
Benefit community Like Co-op type, but Yes, members Must primarily benefit Yes, asset lock Yes, if it meets the Scotland: no.
other than just own new legislation liability limited to non-members - 'asset only survives criteria for being a Northern Ireland:
members and have provides option of amount unpaid on lock' applies. dissolution if new charity. legislation not yet in
special reason not to more secure form of shares. statutory form of place.
be companies. 'asset lock'. asset lock
adopted.
First ready-made Similar to company Yes, members Members are not Yes. Cannot be Scotland: separate
corporate structure but with different either have no permitted to benefit anything but a but similar
specifically designed terminology, eg liability or limited and charity trustees charity, and must legislation and
for charities. 'charity trustee' liability. are only able to meet the criteria regulator. Northern
instead of 'director'. benefit if constitution, for being a charity. Ireland: legislation
court or Charity not yet in place.
Commission give
permission.