The limited company is an organisational structure which gives limited liability to its members. Some social enterprises take on the form of a limited company. This is a more accountable form than, for example, an unincorporated association.
Limited companies may have an 'objects' clause that sets out the company's aims or purposes. Although these objects can be commercial, if your business is a social enterprise, they must also relate to social and/or environmental objectives such as regenerating an area or providing employment and/or training for people disadvantaged in the labour market. Social enterprises that are registered charities must only have objects that the law defines as charitable, such as relieving financial hardship or promoting education.
There are two incorporated forms to choose between when setting up a social enterprise as a limited company:
The issues are complex and you should seek professional advice. See our guide on how to set up and register a limited company (private or public).
All limited companies - including Community Interest Companies (CICs) - must register (incorporate) and file annual returns at Companies House. If you are in England, Scotland or Wales, you can register your limited company with Companies House using our online company incorporation service. Limited companies must also submit a set of memoranda and articles of association. A standard incorporation certificate costs £20.
There is a fee for incorporating your company with Companies House. The fee varies depending on:
Limited companies, with the exception of CICs, can also be set up as charities if the organisation has exclusively charitable objects and is for the public benefit, and should (in most cases) apply to the Charity Commission to be registered as a charity. However, it is very rare for a CLS to be a charity. See the pages in this guide on social enterprises as registered charities and on Community Interest Companies.