Understanding Social Enterprises

What is a Social Enterprise? 

Social enterprises are businesses that put the interests of people and planet ahead of shareholder gain. These businesses are driven by a social/environmental mission and reinvest profits into creating positive social change. They aim to get most of the income they need from trade rather than from funding or donations.  

How are they structured legally?  

Social enterprises can take on many different legal structures. Some charities operate as social enterprises, so social enterprises can have a charity legal structure. 

A common legal structure for a non-charitable social enterprise is a Community Interest Company (CIC). A CIC is a special type of limited company which exists to benefit the community. It is not a charity. 

Other legal structures for a social enterprise include: 

  • a private company limited by guarantee or shares 
  • a co-operative society 
  • a community benefit society 
  • a charitable incorporated organisation (CIO) 
  • a sole trader or business partnership 

Did you know that TOMS Shoes is a globally successful Social Enterprise alongside other examples of this structure such as The Big Issue and Divine chocolate? There are many examples of local social enterprises in the Northeast such as the Big River Bakery.  

If you require more information on these enterprises, please refer to the Gov.uk website here. The Social Enterprise UK website also has a range of useful guidance here.

Any further queries? VODA can offer support, advice and training to your VCSE group. Please contact VODA’s Core Services Team by telephone on 0191 643 2626 or by email on [email protected] 


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