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What are social enterprises?

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Your new organisation may be more suited to the model of a social enterprise but the term spans a range of legal forms.

What is a social enterprise?

A social enterprise is a business with primarily social or environmental objectives. Profits are principally reinvested for those objectives, with surpluses being returned to the business or the community it serves, rather than being used to maximise profit and owner or shareholder value.

The term 'social enterprise' does not have a formal legal meaning and is not a formal status with HMRC or other government agency. It is a general description that could be applied to many legal forms of organisation including those with charity status. These legal forms may be.

Revenue

A social enterprise expects to generate revenue from the goods, services or facilities they provide, although this income may sometimes be supplemented by other sources of funding.

Tax

A social enterprise might enjoy some tax benefits but these should not be assumed. They are often dependent on your legal form and its tax status and should be clarified with HMRC before proceeding on a basis which relies upon tax benefits for financial viability. 

Examples

Social enterprises exist in nearly every sector from consumer goods to healthcare.  Some well know examples include: The Big Issue, Divine Chocolate and the Eden Project.

Case study: Travel2Give

Travel2Give operated as a high street travel retail business. After working with a local children's charity their priorities changed and now they are registered as a Community Interest Company. They sell holidays and work with travel operators to donate money to their charity partners. Read the Travel2Give case study.

Further information

Page last edited Oct 01, 2019

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