What is a social enterprise?
The government defines social enterprises as “...... businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners”.
Social enterprises are businesses driven by social objectives. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social purpose is central to what they do. Rather than maximising shareholder value their main aim is to generate profit to further their social goals.
Some examples of social enterprises
The Eden Project and Jamie Oliver's restaurant Fifteen are examples of social enterprises. So are award winners Divine chocolate a fair-trade chocolate company co-owned by the cocoa farmers cooperative Kuapa Kukoo in Ghana. Social enterprises cover a huge range of industries - Cafedirect is a social enterprise and also the UK's largest fairtrade hot drinks company.
What is a community interest company (CIC)?
Teresa Lewis and Paul Lewis, the founders of Lewis Psychology CIC, are philanthropic entrepreneurs who wanted their work to benefit the wider community with a clear assurance of not-for-profit distribution status. The community interest company (CIC) model met their need for a transparent, flexible model that is clearly defined and easily recognised as a social enterprise.
The Asset Lock, a fundamental feature of CICs, ensures that the assets of Lewis Psychology CIC (including any profits or other surpluses generated by its activities) are used for the benefit of the community.
Together with the company annual accounts, Teresa and Paul present an annual community interest report for public record. The report shows what the company has done during the year to pursue its pre-specified community interest.
A CIC is a legal form created specifically for social enterprises and as such is accountable to the CIC Regulator at Companies House. It is a Limited company created under the Companies (Audit Investigations and Community Enterprise) Act 2004, for use by people who want to conduct a business or other activity for community benefit, and not purely for private advantage.
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