Setting up a social enterprise

'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:

• limited company
• charity or a Scottish Charitable Incorporated Organisation
• co-operative
• registered societies (previously known as 'industrial and provident societies')
• community interest company (CIC)
• sole trader or business partnership

Community interest companies (CICs)

A CIC is a special type of limited company. It 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 Co-operative Development Scotland 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 - represent frontline social and community enterprises in Scotland
• Just Enterprise - offer one-to-one advice sessions and training for start-ups and established social enterprises
• Social Investment Scotland - provide social loan finance and business support to social enterprises and charities across Scotland
• Highlands and Islands Enterprise - help social enterprises based in the Highlands and Islands
• FindBusinessSupport.gov.scot - lists a range of funding and support options that social enterprises can use

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