WLSEN uses the criteria for social enterprise set out in the Social Enterprise Code developed by the Scottish social enterprise community.
- A social enterprise is a business trading in the marketplace – selling goods and services – but whose primary objective is to achieve social and/or environmental benefit
- The constitution of a social enterprise must include the requirement that profits are reinvested in the business or in the beneficiary community – and not distributed to owners/shareholders/investors
- The constitution will require that if dissolution should occur, assets of the social enterprise will be reinvested in another organisations with similar aims and objectives (Criteria 2 and 3 are ‘an asset lock’ – the defining characteristic of a social enterprise that distinguishes it from the private sector)
- Third sector organisations who do not aspire to financial independence through trading are different from social enterprises
- Social enterprises are distinct from the public sector and cannot be a subsidiary of a public body
For more information on the code click here.
The most common legal models for social enterprises are:
- Companies Ltd by Guarantee (with or without charitable status)
- Community Interest Companies (CICs)
- Scottish Charitable Incorporated Organisations (SCIOs)