Are nineteen-century legal forms more appropriate for social enterprise than we might think?

I recently blogged about legal forms that social enterprises are adopting, drawing on published figures from the respective regulatory bodies, in an attempt to see if the hype...

I recently blogged about legal forms that social enterprises are adopting, drawing on published figures from the respective regulatory bodies, in an attempt to see if the hype surrounding certain forms is matched by reality.

Recognising that as great as this blog is, not everyone subscribes to it, I also posted it into a few other forums and got some really useful comments which have made me revisit this subject; this time comparing new registrations against the current make-up of the social enterprise sector (as identified by the Social Enterprise Coalition's research paper published earlier this year) and also Dave Hollings' experience as a leading practitioner in the make-up of new social enterprise registrations that he deals with.

For the sake of ease of comparison, I've looked at how the 'big 4' (companies limited by guarantee, charities, community interest companies, and Industrial and Provident Societies) square up against each other according to each of these sources by ranking of popularity.
And actually, there's a high degree of consistency – CLGs are by far the dominant choice between all. The averages then show its charities, followed by CICs and in a respectable 4th place, IPSs.

While the CIC statistically outnumbers IPSs, the gap between these two forms is not as great as might be imagined: the SEC research shows only 5% difference between their current use, and its 4% by new registrations.
Could this be indicative that a legal form created in the nineteenth century to explicity support the co-operative movement is still resonating with the wider social enterprise sector today; and that as people explore their choices in detail, they're finding that the CIC model, while obvioulsy attractive in some instances, isn't the be all and end all that its presented as in some quarters?

(NB: interestingly, the SEC research also identifies and lists sole trader and unincorporated association as legitimate forms for social enterprise…)

In this article


Join the Conversation