You must choose a business structure if you are starting a business that helps people or communities (a social enterprise).
If you want to set up a business that has social, charitable or community-based objectives, you can set up as a:
- limited company
- charity, or from 2013, a charitable incorporated organisation (CIO is a new legal structure for charities)
- industrial and provident society
- community interest company (CIC)
- sole trader or business partnership
If you are setting up a small organisation like a sports club or a voluntary group and dont plan to make a profit, you can form an unincorporated association instead of starting a business.
Community interest companies (CICs)
A CIC is a special type of limited company which exists to benefit the community rather than private shareholders.
To set up a CIC, you need to apply to Companies House, and:
- include a ‘community interest statement’, explaining what your business plans to do
- create an ‘asset lock’- a legal promise stating that the company’s assets will only be used for its social objectives, and setting limits to the money it can pay to shareholders
- get your company approved by the community interest company regulator – your application will automatically be sent to them
The CIC regulator has guidance on CICs, including the forms you need to set one up.
Co-operatives and industrial and provident societies are both types of mutual. A mutual is an organisation owned by, and run for, the benefit of its members.
Find out about legal forms for social enterprise.
There are also opportunities to invest in local enterprise with community shares or to bid to run a local service.
Start a business to help people or communities – business structures including community interest companies and co-operatives