Legal Structures - Third Sector Dumfries & Galloway

Legal Structures

Once you have your idea for your social enterprise, one of the steps to making it real is to consider forming a legal entity.

The term social enterprise does not have a formal legal meaning and is not a formal status with HMRC or other government agency. It is a general description that can be applied to many legal forms of organisation, including those with charity status.

The principle is that they generate revenue (money) and don’t just survive on grants or fund raising, and the profits are not distributed to shareholders or owners.

Getting the right legal form for a social enterprise is key to determining how the business can run going forward. Each different legal form has specific aspects, and pros and cons, so it’s important to understand them fully to ensure that you pick the one that best suits your aims, activities, money, membership, impact and governance requirements.

There’s no denying that legal form is a complex area and requires time to investigate and think about as part of the process of creating a social enterprise. Team members at Third Sector Dumfries and Galloway can work with you to explore the various legal forms in relation to your aims.