Transcript Is social enterprise a model for creative organisations?

Is social enterprise a
model for creative
organisations?
Scottish Charitable
Incorporated
Organisation (SCIO)
What is it?
• Scottish Charitable Incorporated
Organisation (SCIO)
• Charities & Trustee Investment
(Scotland) Act 2005
• Newest charitable legal form
– Available since April 2011
• Purpose built specifically for Scottish
charities
Main Features
• Charitable and incorporated (but
not a company in traditional
sense)
• Regulated by OSCR only
• Limited liability for Members and
Charity Trustees
• Separate legal personality
• Flexible - single tier /two tier
• Member importance – greater
legal duty & ultimate control
SCIO Fundamentals
• Head office must be in Scotland
• At least 2 members (may include
some or all of the Charity Trustees)
• Must have 3 Charity Trustees
• Existence depends entirely on
charitable status
• Register of Members AND Charity
Trustees must be kept
• Members Duties/Powers
• Asset lock – not for profit and non
distribution of assets upon
dissolution
SCIO Fundamentals
• Two tier or single tier
– Two tier – separate Members and
Trustees
– Single tier – Trustees are the Members
• AGM must be held annually
• Must contain SCIO in name and/or
on branding/paperwork
• Must pass charity test
• May set up trading subsidiaries
Benefits:
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Separate legal personality
Limited liability for Members AND Trustees
Single regulatory requirements – OSCR
Protects against charity trustee personal liability
Accounting procedures less onerous for smaller
charities
Less administration (i.e.no need to notify about
appointments/resignation of Board)
Viewed favourably
Open/transparent
Charity tax relief
Rates relief
Can receive donations and gift aid
Greater access to funding streams
Merging with other SCIO’s requires little
paperwork
Barriers:
• When SCIO winds up it ceases to exist entirely
• Not quick to establish (3 months minimum)
• Must keep register of Members as well as
Trustees – could be onerous if large
membership
• Existence dependent entirely on charitable
status
• Cannot convert to another legal form
• As with any charitable form, restrictions in
activity and trading
• Must be purely not for profit
• Still unknown outwith sector
• Cannot grant floating charge in support of
debts
Establishing SCIOs?
• Prepare SCIO constitution
• Application to incorporate as a
SCIO form
• Trustee Declaration form
• Application must be delivered to
OSCR for processing along with
any supporting documents like a
business plan/funding application
Establishing SCIOs?
• Within 90 days you will be
informed of a decision or asked
for further information or
clarification about your
application
• You must pass charity test =
charitable purpose – activity –
public benefit!!
Summary:
Is the SCIO suitable for social enterprises?
• Yes as much as any charitable legal form is!
• Social enterprise - businesses working to achieve
social and environmental objectives
• Similar use of profit & aims and objectives BUT
• You may not as social enterprises wish to be so
restricted in trading/activity
• Charity first and foremost but may still operate as
a social enterprise
• Do not have to be charitable – lots of structure
options available
• Retain flexibility of non-charitable legal form to
allow you to be more entrepreneurial?
• Option of social enterprises as trading subsidiary?