National Commissioning and Contracting Conference September 2014 Social Enterprises Now the Best Model for Service Delivery? by Léonie Cowen National Commissioning.

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Presentation transcript:

National Commissioning and Contracting Conference September 2014 Social Enterprises Now the Best Model for Service Delivery? by Léonie Cowen National Commissioning and Contracting Conference September 2014 Social Enterprises Now the Best Model for Service Delivery? by Léonie Cowen © Léonie Cowen & Associates

WHAT IS A SOCIAL ENTERPRISE? Government definition: “businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners” Government agenda – mutuals and social enterprise models © Léonie Cowen & Associates 1

LEGAL STRUCTURES FOR SOCIAL ENTERPRISES (1) Company limited by guarantee with or without charitable objects Charitable Incorporated Organisation Registered societies (see Co-operative Community Benefit Societies Act 2014) True trust © Léonie Cowen & Associates 2

LEGAL STRUCTURES FOR SOCIAL ENTERPRISES (2) Community Interest Company Cooperative Company limited by shares Partnership Acts vehicle – is it appropriate? Combination of different structures © Léonie Cowen & Associates 3

WHO OWNS THE ENTERPRISE? The staff – what is an employee owned mutual? The Trustees or members? Shareholders A combination? © Léonie Cowen & Associates 4

IS IT CHARITABLE? Charities have to be for charitable purposes and wholly for public benefit No private gain! © Léonie Cowen & Associates 5

PEOPLE ISSUES Terms and conditions Pensions Sharing risk and reward © Léonie Cowen & Associates 6

TAXATION IMPLICATIONS Non domestic rates VAT Corporation tax © Léonie Cowen & Associates 7

BUSINESS ISSUES Solvency and cash flow! Set up costs and risks Does the business model work - sustainability? Can the enterprise win work? © Léonie Cowen & Associates 8

POINTS TO REMEMBER Social enterprises and mutuals are not outside the Public Contracts Regulations Community right to challenge under Localism Act 2011 Some social enterprises are successful and some are not! © Léonie Cowen & Associates 9

© Léonie Cowen & Associates 10 Leonie Cowen & Associates 3a Loveridge Mews, London NW6 2DP Telephone: Fax:

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