introduction and overview of options for social enterprises in the UK as to how they can incorporate themselves within the various legal structures and options that exist; delivered as part of a series of free webinars hosted by Unltd during the summer of 2015.

1. What you need to know about legal
structures for #socent
(without melting your brain...)
July 2015
http://about.me/adrianashton
t: @adrianashton2
f: adrianashtonconsultant
@UnLtd

2. In the next hour (or so...)
• Why we need to talks about legal forms
• Regulators!
• The 16 options...
• Making sense of it all and where to go next

3. Some opening words of
reassurance about me...
• Nationally reputed authority on social enterprise legal
structures and governance
• Successfully challenged CIC legislation
• Approved specialist consultant to Dept Health ‘right to
request’ programme
• Part of Cabinet Office’s original ‘Mutuals Information Service’
• BUT...that doesn’t mean you should take everything you hear
as ‘gospel truth’ (see last slide)

4. Legal forms are important
because:
• Credibility
• Ability to attract finance
• Flexibility over trading activities
• Protection of individuals’ risk
• Protect original social mission
• Things (people and markets) change over
time...

5. Different types
• Co-ops
• Charities
• ‘Social business’
• Development Trusts
• Social Firms
• ...
But all (should) share
common defining
characteristics of
#socent:
1. Trading to achieve social
good
2. Limit on distribution of
profits
3. Asset lock

6. Different Forms
• Charity
• Company – with/without shares
• CIC – with/without shares
• Partnership
• Co-op Society – small interest or wider benefit
• (sole trader?)

7. Regulators
• Companies House / FCA
– No prudential role (ie – can't tell you how you should act)
– Ensure relevant records being kept
– Receive annual returns
– Has power to wind up and investigate
– Has power to take actions against individual Directors

8. Regulators
• CIC Regulator / Charity Commission
– Limited prudential role (can enforce decisions on governance or
trading)
– Ensure relevant records being kept
– Receive annual returns
– Has power to wind up and investigate
– Has power to take actions again individual Directors
– Has power to replace Directors and appoint ones of own choice
– Power to sue other persons in your name (CIC only)

9. 16 Options!
• Companies (x6)
– Guarantee, Share, CIC
• Charity (x3)
– unincorporated/company/CIO
• Partnership (x2)
– ‘regular’/limited liability
• Trust
• Sole trader
• Unincorporated association
• Society (x2)
– Co-operative/Community Benefit

10. Companies
• Most commonplace
• Flexibility within rules allow for values to
be 'entrenched' by members
• Register on-line, paper forms, agent

11. Community Interest Companies
• Based on pre-existing companies
• Visible 'brand' to encourage/support sector
• Additional legislation (financing)/ regulatory
body
• Application process (paper-based)
alongside company registration

12. Charities
• 'doing good things' rather than 'doing economic things
• Paternalistic culture
• Generally recognised and trusted
• Larger charities trade most of their income
• Application process on-line (need basics first – bank
account, etc)

13. Partnerships
• Ability to offer larger service
• Single registration (and returns) with HMRC
• Potential to share tax
• High flexibility
• High personal risk
• Benefits of partnership agreement

14. Co-operatives
• The 'daddy' (and mummy) of social enterprise
• Origins in self-help and tackling unfair market
practices
• Democracy = key defining characteristic
• Creation of dedicated legal form in 19th
century
(IPS), although can be incorporated in any form

15. Over-arching concerns
• C - credibility
• R – relationships
• A – accountability
• M – money
• P - power

16. SocialEnterpriseUK sector mapping

17. NCVO sector almanac 2012

20. NEVER PICK YOUR LEGAL FORM ON
THE BASIS OF WHAT SOMEONE ELSE
SAYS YOU SHOULD BE!!