The organisational type of your social business is the way you regard your enterprise and present it to the world.
It is important to distinguish between organisational type and the legal form, which is how the law regards the enterprise.
For example, social enterprise is an organisational type which might use a company, society, community interest company or partnership as its legal form.
Social enterprise organisational types
Listed below are some of the common organisational types used by social businesses:
A business with primarily social objectives. Profit is mostly reinvested in the business or in the community, rather than maximising profit for shareholders and owners. A Community Enterprise is also a type of social enterprise company owned and run by a geographical community or a community of shared interest.
An autonomous association of persons united in a jointly-owned and democratically controlled enterprise (International Co-operative Alliance definition). They work voluntarily to meet common economic, social and cultural needs. A co-operative business can be split in many sub-categories:
- Worker co-operatives are owned and run by their workers
- Housing co-operatives are owned and run by their tenants
- Consumer co-operatives are owned and run by its customers
- Co-operative consortia are owned and run by other businesses using the services of the enterprise
- Multi-stakeholder co-operatives can be a mixture of any or all of the above
Other types of social enterprise companies
Community Land Trust - an organisation created to hold land as an asset for community use.
Credit Union - a non-profit financial institution owned and operated entirely by its members.
Development Trust – a community-based enterprise that secures and manages community assets.
Social Firm – a business committed to creating employment and training opportunities for people furthest from the labour market.
Starting a social enterprise
An individual can still trade for a social purpose as a sole trader and call themselves a social business. In fact, there is very little legislation or regulation of the use of organisational types in business branding or marketing. You can have several organisational types, but you will have only one legal form.
Once you’re familiar with the different types of social business, it’s time to choose a legal form for your social business.
The Business Wales website offers more resources on the organisational types of social enterprise.