Different types of social enterprises

The social enterprise sector is incredibly diverse, encompassing co-operatives, development trusts, community enterprises, housing associations, football supporter groups, social firms and leisure trusts, among others. As a result, social enterprises use a wide variety of legal forms; some incorporate as companies while others take the form of industrial and provident societies. From July 2005 social enterprises have also been able to register as Community Interest Companies (see below).

 

Below we have listed some of the different types of social enterprises we know about.

 

If you’d like to add any more to this list, please let us know.

 

Industrial and Provident Society for the Benefit of the Community. One of two types of Industrial and Provident Society. IPS Ben Coms must retain all profits for investment in purposes beneficial to the community, normally defined in the organisation's constitution. Examples of IPS Ben Coms include GLL the company behind Greenwich Leisure.

 

Charitable status is available to all organisations with exclusively charitable purposes and activities; being alleviation of poverty, advancement of religion or education and "other purposes beneficial to the community". Charitable status comes with highly beneficial tax advantages but trading is limited must be in line with charitable purpose; hence it is appropriate for some social enterprises but not all. Charities in the voluntary sector can also have subsidiary trading arms.

 

Businesses that have a strong geographical definition and focus on local markets and local services.

 

Organisations trading for social purpose with a community base - might be a community of place, a community of interest, or both.

 

A new legal form proposed for social enterprises. They will combine the features of a company, with some elements from charitable organisations e.g. they will have a lock on assets to prevent them being sold off for private gain. Other proposals include a specialist regulator and an annual social report, explaining how they are delivering community benefits.

 

A registered company with members rather than shareholders; members guarantee a nominal sum for paying liabilities in the event of insolvent liquidation. Members may also pay a membership subscription.

 

A registered company which is controlled by its shareholders. Shares may be privately held, or in the case of a public company, shares may be available to trade on the open market.

 

Structured and run in accordance with the seven international co-operative principles:

Co-operatives have traditionally been incorporated as Bona Fide Co-operatives under theIndustrial and Provident Societies Act. However it is possible to incorporate as a company with co-operative principles. A key feature of co-operative is ownership and control by members. Members may be employees (a worker co-op), customers (a consumer co-op), tenants (housing co-op), or a combination of these groups (multi-stakeholder co-op).

 

Generally a locally focused enterprise engaged in regeneration activity through a wide range of trade and service delivery. Common activities include community development, training, property development and management, environmental improvements, business development, building restoration and managed workspace. A development trust is not a legal structure in itself, but is usually registered either as a company or as an Industrial and Provident Society.

 

Owned and controlled by people who work for it.

 

New model for semi-independent institutions within the NHS. Foundation Hospitals will be able to set rates of pay freely, dispose of land, borrow money and allow up to ten percent of there beds to be used by private patients. They will be able to retain and reinvest any surpluses made from their budget.

 

Not-for profit companies in charge of managing housing stock. The term is used interchangeably with Registered Social Landlord - non-profit organisations whose aim is to provide affordable housing.

 

Companies that provide training and work for the long-term unemployed.

 

Describes organisations whose members have joined together with a common purpose to provide a shared service for mutual benefit. Includes co-ops, building societies and some employee owned businesses. In a mutual organisation it is necessary to become a member to access the benefits.

 

A business created to provide integrated employment and training to people with a disability or or other disadvantage in the labour market.

 

A self-governing body of people who have joined together voluntarily to take action for the benefit of the community, and established otherwise than for financial gain. It does not have to be a registered charity, but if it is not, the aims, objectives and methods of working of the organisation must be written down in a publicly available document. The organisation should be open to all members of the community with interests relevant to the publicly stated aims.

 

Common and Industrial and Provident Society bona fide Co-Op where the members are the employees of the business. As such the employees both own and manage the business that they work for.