Business models

Social businesses and enterprises come in all shapes and sizes. They incorporate many different businesses models. A few of the most popular are listed below.

Community Interest Companies

Community Interest Companies (CICs) were introduced by the Government under the Companies Act in 2006. They incorporate social enterprises which deliver a benefit to their communities. Assets owned by the company are held in an asset lock which secures those assets to applications for the benefit of community. Limitations will also be applied to payments made to shareholders. A profit can be made, but the primary focus must remain on community development.

Example of a CIC: Striding Out

Cooperative

Cooperatives are owned and democratically controlled by their members. They balance risk and reward among their members. The need to make a profit will always be weighed carefully against the interests of the communities and their members.

Example of a cooperative: Bishopston Trading Company

Private company limited by shares

A private company limited by shares raises money through the sale of shares in the company. Shareholder liability is limited to the amount remaining to be paid out on shares. Profits remain in the company until it is paid out in the form of salary to the employees or dividends to shareholders.

Example of a private company limited by shares: Adopt a Business

Public limited company

A public limited company (PLC) is a company which sells shares to the public. The company may be listed or unlisted on the stock exchange. The issued share capital of a PLC must be greater than £50,000 meaning many companies choose to use the PLC abbreviation as a recognition of status.

Example of a public limited company: Regenersis

Company limited by guarantee

A company limited by guarantee (CLG) does not have share capital or shareholders. Instead it has a board of guarantors. This board undertakes to pay a nominal amount in the event that the company is wound up. 

Example of a CLG: Alive&Kicking

Industrial and Provident Society

An Industrial and Provident Society works either as a cooperative or an organisation working towards the benefit of society. While a cooperative works towards the benefit of its members, an IPS has the benefit of the wider community at heart also.

Example of an IPS: Shared Interest Society

Limited liability partnership

In a limited liability partnership, one or both of the partners has limited liability. This means they will not be held accountable for any misconduct or incompetence perpetrated by the other party.

Example of an LLP: Buzzbnk