Legal Framework, Funding, and Procurement Polices to Accelerate the Growth of the Social Enterprise Ecosystem

Introduction

Appropriate legal frameworks can be useful for many reasons, including capturing their specific needs, to govern access to public procurement, and to define the beneficiaries of other forms of public support for the organisation, to open up opportunities for fiscal relief and incentive. Fiscal incentives can contribute to overcoming some of the difficulties confronted by social enterprises when working with disadvantaged groups (such as, requirement for intensive support, etc.). Social enterprises usually chose the legal form that they believe will best serve their social and environmental purpose. Some are limited companies just as for-profit enterprises, and are regulated by Companies House. Others with strong co-operative roots often register as an Industrial and Provident Society. A social enterprise could also be private joint stock or limited liability companies insofar as they are established to pursue social goals, rather than generate profit for owners and shareholders. A social enterprise can be a sole trader who has decided to donate the majority of generated profit to social purposes (good cause), a partnership or it may take an unincorporated legal form, such as an unincorporated association or a trust (or a combination of the two). Several social enterprises in the UK are registered as Community Interest Companies (CIC) which means they are regulated both by Companies House and the CIC Regulator (Regulator of Community Interest Companies, 2007). The legal structure available to social enterprise in the UK is displayed in Table 1 below.