At its core, a social enterprise is a business that generates a profit and reinvests it in a social or environmental mission. Whilst there is no single definition or legal structure, most social enterprises in Scotland fall within Scotland fall with the parameters of the Voluntary Code of Practice for Social Enterprise.
An entrepreneur is a person or group of people who set up a business.
Mission/Purpose Led Businesses
Taking many forms, these phrases refer to a wide range of responsible businesses who are defined by a social and/or environmental mission or purpose. Whilst most social enterprises are mission/purpose led, not all mission/purpose led businesses are social enterprises, as defined by the code.
A legal structure is an registered entity and structure for an organisation regulated by a regulatory body such as Companies House or OSCR (Scottish Charity Regulator). Common legal structures for social enterprises are Community Interest Companies (CIC), Scottish Charitable Incorporated Organisations (SCIO), and Companies Limited by Guarantee (CLG). You do not need to have a legal structure in place to access early stage support from Firstport.
You can find some more useful information on Legal Structures through SenScot Legal’s blog: Third Sector Legal Structures – Mythbusters.
An asset lock is a constitutional device that ensures the distribution of profits or residual assets (land/buildings etc.) are used for a public or community benefit. Often asset locks tie the benefit to the social or environmental mission of the organisation.
An asset lock does not, however, restrict the payment of salaries to staff nor the re-investment of profits into the organisation’s development. Asset locks are one of the defining characteristics of social enterprise.
A sole trader is someone who is trading without a registered legal structure. A sole trader does not have a board of directors.
Board of Directors and/or Trustees
The board of directors and/or trustees make up the governing body of an organisation and are the individuals who hold legal responsibility for the company’s activities.
Different legal structures set our rules who can and cannot be on a Board of Directors as well as the minimum numbers required.
Funding refers to financial capital given to an organisation for its development, or towards the running costs of a programme. For most organisations, funding can take the form of grants, repayable finance, or equity. Funding from Firstport is either through grants or repayable finance.
Companies in the earliest stage of development are often referred to as start-ups. While there is no definitive age, this term is readily applied to companies that have not started or are in their first few years of trading.
Business Support is a generic phrase referring to the advice an individual may receive as they start-up and grow their enterprise. Often this guidance is tailored to the specific company needs and includes advice on legal structures, business planning, marketing and more. As part of the Just Enterprise consortium, Firstport delivers a series of business support workshops and one to one sessions.
Similar to an asset lock, a mission lock is a mechanism in an organisation’s governing documents that requires a company to consider its social and environmental outcomes in equal measure to its financial outcomes.
A mission lock does not restrict a company’s profit distribution where it does not have a detrimental effect on a company’s social, environmental outcomes and is not equivalent to an asset lock.
B Corps are companies that have had their social and environmental performance, public transparency, and legal accountability to balance profit and purpose independently verified by the international organisation B Lab. Many social enterprises can become B Corporations if they go through the verification process, but not all B Corporations are necessarily social enterprises.
Incubators are cohort-based programmes designed to help very early stage ideas that are not fully developed. Often these programmes will work towards getting a company to form and begin trading.
Firstport’s What If… programmes are a type of incubator, focusing on a specific part of the country.
An accelerator is a structured cohort based programme of support which helps an organisation speed up its development and grow to the next stage. In most cases, these are programmes for existing organisations with a track record. In Firstport’s case, our LaunchMe accelerator is to help ambitious social enterprises scale and grow.
Not found what you’re looking for? We’re always looking to improve our Jargon Buster so why not get in touch and tell us what should be on this page?