What is a Social Enterprise – WLSEN

WLSEN uses the criteria for social enterprise set out in the Social Enterprise Code developed by the Scottish social enterprise community.

  1. 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
  2. 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
  3. 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)
  4. Third sector organisations who do not aspire to financial independence through trading are different from social enterprises
  5. 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)
  • Charities
  • Community Interest Companies (CICs)
  • Scottish Charitable Incorporated Organisations (SCIOs)
  • Co-operative