Legal Structures
One of the social enterprise sector’s greatest strengths is its diversity, and this is reflected in the complex legal and regulatory framework under which many social enterprises are currently required to operate.
The choice of legal model is often determined by the nature of the activities being undertaken by the social enterprise, the requirements of the key stakeholders, the appropriate governance structure and crucially, the ability to access the required finance. Some social enterprises use group structures, making use of a variety of legal forms in order to carry out the full range of their activities.
Many social enterprises point out that the legal model is only the vehicle for their activities, not the defining feature of what they do. The Community Interest Company legal form has been developed to enhance the ability of social enterprises to be identified as such. This brand is not the only brand: other legal structures include Community Benefit Societies (a type of co-operative), Companies Limited by Guarantee and Companies Limited by Share.
For an overview of the various legal structures for social enterprises see the Legal Structures for Social Enterprise document in the resources section of this website.
Also see the Business Link guide ‘How to set up a social enterprise’, which details the differences between the various forms of social enterprise.
We would always encourage you to take professional advice from a social enterprise business advisor when deciding on the most appropriate legal form for your enterprise.
For further information please call us on 0115 871 4760.