Setting up a Social Enterprise
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Setting up a Social Enterprise
enterprise
they are known as exempt charities and report to the Financial Services Authority( FSA),
To register as a BenCom, you must demonstrate your social objectives and your reasons for registering as a society, rather than a company. It can cost between £ 40 and £ 950 to register- payable each year.
Charitable social enterprise
If the purposes of your social enterprise are exclusively charitable and are for the public benefit you could become a charitable social enterprise. Charitable purposes include advancing education or religion, and relieving financial hardship but there are several others.
The directors or trustees are responsible for administration and management and generally must not be paid for this work. Any profits or surpluses made by the charity must be invested back into the charity and used to support its charitable purposes.
You would need to register this type of social enterprise with Companies House or the Financial Services Authority, and with the Charity
Commission. It must have an annual income of more than £ 5,000 a year.
Community Interest Companies
Community Interest Companies( CICs) are limited companies that provide benefits to a community.
To register as a CIC, you must register with Companies House either as a company limited by shares or a company limited by guarantee. You will need to provide a community interest statement describing your social purpose. A CIC regulator will approve your application if your statement passes the community interest test- i. e. the business activities you intend to undertake will be carried out for the benefit of the community or a section of it.
CICs do not have charitable status. This means they do not get the tax benefits of a charity but also do not have the strict reporting requirements of a charity.
Charitable Incorporated Organisation
From 2008, you will be able to set up as a Charitable Incorporated Organisation( CIO). It will be available to new organisations and existing charities that meet all the criteria for being a charity but do not want to use the charity form.
An existing company which is registered as a charity, and charities which are regulated industrial and provident societies, may be able to apply to the Charity Commission for conversion to a CIO, and for the CIO to be registered as a charity.
There are certain conditions under which some charities and companies cannot apply for conversion to CIO. See the Charity Commission website.
Further information:
Charities Commission www. charitycommission. gov. uk
Companies House www. companieshouse. gov. uk /
Social Enterprise Training and Support www. setas. co. uk
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How to raise finance for your business
ISSUE SEVEN 2008 engage | uk