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Understanding social enterprise

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Use this page to understand what social enterprises are and their associated legal structures.

Definition of a social enterprise

A social enterprise is not a legal structure but a way of doing business. The exact definition can vary, but in general they:

  • are focused on their mission and exist to tackle social or environmental issues set out in their governing document
  • re-invest the majority of their profits in pursuit of their mission
  • aim to get the majority of their income needed to operate from trade.

For more information on the definition of a social enterprise, read Social Enterprise Mark’s explanation of a social enterprise.

Find further information on governing documents.

Social enterprises can take on many different legal structures. Some charities operate as social enterprises, so social enterprises can have a charity legal structure.

A common legal structure for a non-charitable social enterprise is a Community Interest Company (CIC). A CIC is a special type of limited company which exists to benefit the community.

GOV.UK has more guidance on setting up a CIC.

Other legal structures for a social enterprise include:

  • a private company limited by guarantee or shares
  • a cooperative society
  • a community benefit society
  • a charitable incorporated organisation (CIO)
  • a sole trader or business partnership.

Find out more about the characteristics of these different legal structures.

Learn about what to consider when choosing a legal structure.

Examples of social enterprises

There is a wide variety of social enterprises operating in the UK, with different legal structures. Below are a few examples taken from Social Enterprise UK.

Further guidance and advice

We suggest getting more information and seeking professional advice when setting up a social enterprise and choosing the right legal structure. Below are a few options for further guidance and affordable professional advice.

Guidance

Advice

Last reviewed: 03 June 2021

Help us improve this content

This page was last reviewed for accuracy on 03 June 2021

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