Legal Structures for Social Enterprise12th October 2015
Robert FosterCo-Founder Red [email protected]
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Och
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Agenda Social enterprise?
What are appropriate legal structures?
Triggers
Options Pros and cons
Delegate advice
Grab me at the
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Who am I?
T: 020-7250-8306
I use business models
to fix
social and environmental problems
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Definitions of social enterprise
“a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners”
UKTI, SE UK
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Triggers Taking on a lease
Buying a freehold property
Taking on employees
Raising finance
Entering into large contracts
Managing the risk associated with your service, product or intervention
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First steps: What do you want to achieve?
What resources do need to set up? Where will you get money from on a day to day basis?
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Personal liability
Management
Succession
Transparency
Constitution
Operations
Consider Branding
Scalability
Personal dynamics
Management flexibility
Stakeholders – internal and external
Required outcomes
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Consider also
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Regulation
Who is the regulator?
What are the reporting requirements?
Control
Ownership vs. stewardship
Board – management, trustees, directors, advisory, shadow?
Do directors get paid? Do you want to be CEO or a trustee?
Funding
Freedom to trade
Access to start-up funding
Tax and surplus implications
VAT exemptions?
Corporation tax?
Profit taking?
Comparison of typical legal forms
q.v. Social Firms, Royal Charter, B Corporation etc.© Red Ochre 2013-15
Unincorporated IncorporatedSole trader / free lancer / social entrepreneur
Limited Company – by Shares / Guarantee
Partnership Limited Liability PartnershipUnincorporated membership association / trust - unconstituted
Community Interest Company – by Shares / Guarantee
Unincorporated membership association / trust - constituted
Co-op forms – Co-operative Society / Community Benefit Society (replaces IPS)*
If wholly and exclusively charitable then Charitable Association or
Charitable company
Charitable Trust Charitable Incorporated Organisation
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