LEGAL AND GOVERNANCE ADVICE FOR SOCIAL ENTERPRISES
Choosing The Right Legal Form
CMS is a nationally recognised expert in legal forms for social enterprise. We are a regular consultee by government on legal forms for social enterprises and have advised several hundred social enterprises with their legal forms. Unlike many advisors in the sector, we offer expert advice in the full range of legal forms for social enterprise:-
- Unincorporated associations
- Companies Limited by Shares or Guarantee
- Community Interest Companies
- Industrial and Provident Societies
- Limited Liability Partnerships
Advising clients which is the best legal form for them, CMS will also create a bespoke set of rules under whatever legal form is chosen.
Most of these legal forms can be registered in a few weeks (although charities will take longer). However, the registration is the end of the process of drafting the right legal form for your social enterprise and you should speak to CMS as soon as possible.
As your social enterprise grows and develops it is good practice to review your legal structure and governance arrangements every few years. Over time these structures can become outdated and can hamper the further development of your business.
There are several things that can happen (and sometimes several happen together):-
a) The nature of your social enterprise can change and the people who were the key stakeholders several years ago are no longer the driving force in the social enterprise.
b) The way in which you wish to be financed may have changed.
c) Your activities may have changed which lead to moving to a group structure.
d) The law may have changed and your governing document does not allow you to take advantage of such changes.
e) A governance structure designed for a four member business will usually not be suitable for, say, a twenty member business.
f) Bad habits can become custom and practice over time, making the social enterprise’s decision making poor and inefficient.
It is CMS’s experience that in more than half the cases we deal with, the problems facing an existing social enterprise are caused in whole or in part by failings in their legal and governance structures.
Don’t let this happen to you call today for advice…
Back to top