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									                                             LEGAL STRUCTURES FOR SOCIAL ENTERPRISE AT A GLANCE
   This is a rough guide to the legal structures most commonly associated with social enterprise. For more information on them, see or the
   websites listed below. For more general information about business structures, including other options such as partnerships and
 limited liability partnerships, see However, there is a lot of law on each of the legal structures described below and you
                                                   should consider seeking legal advice before your organisation adopts any of them.
      Legal structure            Summary - most            Ownership,              Is it a legal person       Can its activities     Assets "locked           Can it be a          Differences in the
                                 typical features        governance and            distinct from those       benefit those who           in" for            charity and get       law as it applies in
                                                           constitution             who own and/or           own and/or run it?       community            charitable status          Scotland or
                                                                                           run it?                                      benefit?             tax benefits?         Northern Ireland?
     Unincorporated            Informal. No general    Nobody owns.                No. Can create            Depends on own         Would need             Yes, if it meets the   No specific
      association              regulation of this      Governed according          problems for              rules.                 bespoke drafting       criteria for being a   differences.
                               structure and you       to own rules.               contracts, holding                               to achieve this.       charity.
                               need to make own                                    property and liability
                               rules.                                              of members.
          Trust                A way of holding        Assets owned by             No. Trustees are          No. The trustees/      Yes, if the trust is   Yes, if it meets the   No, subject to the
                               assets so as to         trustees and                personally liable.        directors cannot       established for        criteria for being a   differences between
                               separate legal          managed in interests                                  benefit, unless the    community benefit.     charity.               English and Scots
                               ownership from          of beneficiaries on                                   trust, court or                                                      trust law.
                               economic interest.      the terms of the trust.                               Charity Commission
    Limited company            Most frequently         Directors manage the        Yes. Members'             Yes (but no            Would need             Yes, if it meets the   No specific
                               adopted corporate       business on behalf of       liability is limited to   dividends etc to       bespoke drafting in    criteria for being a   differences.
 (other than Community
                               legal structure. Can    members.                    amount unpaid on          members if it is a     articles (which        charity.
   Interest Company)           be adapted to suit      Considerable                shares or by              company limited by     could be amended
                               most purposes.          flexibility over internal   guarantee.                guarantee).            by members).                              rules.
  Community interest           Limited company         As for other limited        Yes. Members'             Yes, but they must     Yes, through           No, but can            Scotland, yes.
    company (CIC)              structure for social    companies, but              liability is limited to   benefit the wider      standard               become a charity if    Northern Ireland, no
                               enterprise with         subject to additional       amount unpaid on          community as well.     provisions which       it ceases to be a      specific differences.
                               secure "asset lock"     regulation to ensure        shares or by              CICs can pay limited   all CICs must          CIC or can convert      and focus on            community benefits.         guarantee.                dividends to private   include in their       to the asset-locked
                               community benefit.                                                            investors.             constitutions.         form of a
                                                                                                                                                           community benefit
Industrial & Provident         For bona fide co-       Committee / officers        Yes. Members'             Yes, but they should   Would need             No. It would have      Scotland, no.
    Society (IPS)              operatives that serve   manage an IPS on            liability is limited to   do so mostly by        bespoke drafting in    to be constituted      Northern Ireland,
                               members' interests      behalf of its               amount unpaid on          members trading        articles (which        as community           separate (but
   (Co-operative)              by trading with them    members. One                shares.                   with the society,      could be amended       benefit type of IPS.   similar) legislation.         or otherwise            member, one vote                                      using its facilities   by members).
   Doing/Info/MSR/             supplying them with     (regardless of eg                                     etc, not as a result
                               goods or services.      sizes of respective                                   of, for example,
                                                       shareholdings).                                       shareholdings.
 Industrial & Provident        Benefit the             Like Co-op type, but        Yes. Members'             Must primarily         Yes (asset lock        Yes, if it meets the   Scotland, no.
     Society (IPS)             community rather        new legislation             liability is limited to   benefit non-           only survives          criteria for being a   Northern Ireland,
                               than just their own     provides option of          amount unpaid on          members; asset lock    dissolution if new     charity.               separate (but
  (Community Benefit           members and have        more secure form of         shares.                   applies.               statutory form of                             similar) legislation.
  Society (BenComm))           special reason not to   asset lock.                                                                  asset lock
                               be companies.                                                                                        adopted).
 Charitable Incorporated        First ready-made        Similar to company     Yes. Members'          Members: no.            Yes.   Cannot be              Both Scotland and
   Organisation (CIO)           corporate structure     but with different     either have no         Charity trustees:              anything but a         Northern Ireland,
                                specifically designed   terminology (eg for    liability or limited   only if constitution,          charity, and must      separate (but                    for charities.          "directors" read       liability.             court or Charity               meet the criteria      similar) legislation                           "charity trustees").                          Commission permit.             for being a charity.   and Regulators.

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