What is a Social Enterprise?

A Social Enterprise (SE) is a trading business – selling goods and services – but whose primary objective is to achieve social and/or environmental benefit. SEs are different from those charities and voluntary organisations who do not have financial independence through trading income*.

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Definition of Social Enterprise

A legally Incorporated body can take a number of various forms including limited company, company limited by guarantee, registered charity, charitable incorporated organisation (CIO), community interest company (CIC), co-operative & community benefit societies, credit unions, sole trader or business partnership, in accordance with the guidance link. It also Must be distinct from the public sector and cannot be the subsidiary of a public body.

A legally Incorporated body can take a number of various forms including limited company, company limited by guarantee, registered charity, charitable incorporated organisation (CIO), community interest company (CIC), co-operative & community benefit societies, credit unions, sole trader or business partnership, in accordance with the guidance link. It also Must be distinct from the public sector and cannot be the subsidiary of a public body.

A Social Enterprise has a Legal Requirement to have a Governing Board of Directors.

If you want more in depth information about all areas of Social Enterprise why not download our useful fact sheets below. 

Factsheet 1 - What is Social Enterprise?

Factsheet 2 - Starting up as a Social Enterprise in NI

Factsheet 3 - Governance and Legal Structures for Social Enterprises 

Factsheet 4 - Financial Management Basics 

Factsheet 5 - Social Media Marketing and General Marketing

Factsheet 6 - Social Impact - Why Measure?

Factsheet 7 - What is Social Value?

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A social enterprise trades for profit like a business

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Profits are used to finance their social objectives

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A social objective is helping others

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The whole community benefits

 

Definition of Trading Income

*Trading Income is the activity of buying and selling goods or services

Examples of Trading Income can be defined by the following items outlined below. Trading Income is primarily identified as ‘unrestricted income’ within an organisation’s Annual Accounts submitted to Companies House / Charity Commission as per legal requirements.

 

Included                                   

Buying and Selling of Goods

SLA’s

Provision of a service for which there is a charge

Other Contracted Services

NOT included

Grants

Fundraising

Donations

Summary

A social enterprise is like any other business in that it works to deliver goods and services to make a profit. The difference is that they are driven by their social and environmental purposes and any profit made is reinvested towards achieving these purposes.

The government defines social enterprises as “businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.”

Social enterprise is an umbrella term and encompasses a broad range of social and environmental business. These include credit Unions, cooperatives, community-owned enterprises and trading arms of charities to list just a few.

 

Social Enterprises operate in almost every industry in the UK, from health and social care to renewable energy, from retail to recycling, from employment to sport, from housing to education.