STRUCTURES SUMMARY This is a rough guide to the legal structures most commonly associated with social enterprise. Legal structure Summary: Ownership, Is it a Can its Assets Can it be A most governance legal activities in” a charity difference “locked typical and person benefit those for and get in the law features constitution distinct who own community charitable as it from and/or run it? benefit? status tax applies in those benefits? Scotland who own or and/or Northern run it? Ireland? Unincorporated association Informal; Nobody owns: No: can Depends on need Yes if it No specific no general governed create own bespoke meets the differences. (Community group) regulation according to problems drafting to criteria for of this own rules. for achieve this. being a https://www.gov.uk/unincorporated-associations structure; contracts, charity. need to holding make own property rules. and liability of members. Trust A way of Assets by No: Trustees/ Yes (if trust Yes if it No, subject holding trustees and trustees directors established the to assets so managed in personally benefit only by for criteria for differences https://www.gov.uk/trusts-taxes/overview as to interests of liable. special community being a between separate beneficiaries dispensation benefit). charity. English legal on the terms of from court or and Scots ownership the trust. Charity trust law. from Commission economic permit. interest. Limited company Most Directors Yes; Yes (but no Would need Yes if it Scotland: frequently manage members’ dividends etc. bespoke meets the no. (other than Community Interest Company) adopted business on liability to members if drafting in criteria for Northern corporate behalf of limited to it is a articles Ireland:
STRUCTURES SUMMARY This is a rough guide to the legal structures most commonly associated with social enterprise. Legal structure Summary: most typical features Ownership, governance and constitution Is it a legal person distinct from those who own and/or run it? Can its activities benefit those who own and/or run it? Assets “locked in” for community benefit? Can it be a charity and get charitable status tax benefits? A difference in the law as it applies in Scotland or Northern Ireland? Unincorporated association (Community group) https://www.gov.uk/unincorporated-associations Informal; no general regulation of this structure; need to make own rules. Nobody owns: governed according to own rules. No: can create problems for contracts, holding property and liability of members. Depends on own need bespoke drafting to achieve this. Yes if it meets the criteria for being a charity. No specific differences. Trust https://www.gov.uk/trusts-taxes/overview A way of holding assets so as to separate legal ownership from economic interest. Assets by trustees and managed in interests of beneficiaries on the terms of the trust. No: trustees personally liable. Trustees/ directors benefit only by special dispensation from court or Charity Commission permit. Yes (if trust established for community benefit). Yes if it the criteria for being a charity. No, subject to differences between English and Scots trust law. Limited company (other than Community Interest Company) Most frequently adopted corporate Directors manage business on behalf of Yes; members’ liability limited to Yes (but no dividends etc. to members if it is a Would need bespoke drafting in articles Yes if it meets the criteria for Scotland: no. Northern Ireland: