1. What is a Social Enterprise?

There is no legal definition of a Social Enterprise in Scotland, and different stakeholders have their own views about what the characteristics of a social enterprise are. However, there are a number of descriptions, which share common concepts:

• Social Enterprise in Scotland Census 2015: Businesses that trade for the common good rather than the unlimited private gain of a few. They tackle social problems, strengthen communities, improve people’s life chances and protect the environment. They reinvest any profits to deliver on this social purpose.

• Scottish Government: Businesses with primary 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.

• Social Enterprise Scotland: A dynamic and inspiring way of doing business. Social enterprises are innovative, independent businesses that exist specifically for social and/or environmental purposes.

• Voluntary Code of Practice for Social Enterprise in Scotland: The code sets out five essential elements of a social enterprise.

It’s generally recognised that a Social Enterprise is a business and operates on a profit-making basis, putting those profits back into the social mission or purpose of the organisation.

The term ‘Social Enterprise’ describes the nature of a business, not its legal form. Social Enterprises can take different legal forms, as can charities.