Setting up a social enterprise

You must choose a business structure if you’re 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:

If you’re setting up a small organisation like a sports club or a voluntary group and do not 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’ll need:

  • a ‘community interest statement’, explaining what your business plans to do
  • 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
  • a constitution - you can use the CIC regulator’s model constitutions
  • to get your company approved by the community interest company regulator - your application will automatically be sent to them

The CIC regulator has guidance on setting up a CIC.

Set up a CIC online

Register your CIC online with Companies House.

It costs £27.

You’ll need to create a Government Gateway user ID and password for your company. You cannot use your personal Government Gateway ID.

Set up a CIC by post

Use the forms from the CIC regulator to register a CIC by post.

Further information

Get advice and case studies from Social Enterprise UK, Inspire2Enterprise and UnLtd or download guidance on business structures for social enterprises.

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.

Part of Set up a limited company: step by step

  1. Step 1 Check if setting up a limited company is right for you

    1. Check what a private limited company is

    How you set up your business depends on what sort of work you do. It can also affect the way you pay tax and get funding.

    Check if you should set up as one of the following instead:

    1. Get help deciding how to set up your business

  2. Step 2 Choose a name

    1. Check the rules for company names
    2. Check if the name you want is available
    3. Check existing trade marks

  3. Step 3 Choose directors and a company secretary

    You must appoint a director but you do not have to appoint a company secretary.

    1. Find out what directors are responsible for
    2. Check who can be a director or company secretary

  4. Step 4 Decide who the shareholders or guarantors are

    You need at least one shareholder or guarantor, who can be a director.

    1. Check if you’ll need to issue shares or set a 'guaranteed amount'
    2. Find out how dividends from shares are taxed

  5. and Identify people with significant control (PSC) over your company

    For example, anyone with voting rights or more than 25% of the shares.

    1. Find out what counts as a PSC

  6. Step 5 Prepare documents agreeing how to run your company

    You need to prepare a 'memorandum of association' and 'articles of association'.

    1. Find out how to create a memorandum and articles of association

  7. Step 6 Check what records you'll need to keep

    1. Check the company and accounting records you must keep

  8. Step 7 Register your company

    You'll need to register an official address and choose a SIC code - this identifies what your company does.

    1. Check the rules for company addresses
    2. Check what your SIC code is
    3. Register your company with Companies House

    Most people can register for Corporation Tax at the same time as registering with Companies House.

    If you cannot, register separately with HM Revenue and Customs (HMRC) after you’ve registered your company with Companies House.

    1. Register with HMRC for Corporation Tax