	Social Enterprise Law Surveys
	Northern Ireland
	(Europe) Firm Arthur Cox
What jurisdiction(s) do you practice in?	Northern Ireland
What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade ...	The most commonly used for-profit corporate organizational form in Northern Ireland is a limited liability company as set out below: Private company limited by shares: A company limited by shares is incorporated with issued share capital, whereby shares in the company are issued to shareholders representing (in general terms) each shareholder’s percentage ownership and voting control over the entity. In addition, the share percentage also (again generally speaking, although this can differ in specific companies) represents a shareholder's entitlement to the company’s profits as well as their personal financial liability for the company’s debts. Note directors are also appointed to manage the day to day running of the company. Private company limited by guarantee: A company limited by guarantee is set up with no share capital. Instead, the relevant members act as guarantors who each agree to pay a fixed sum of money (the amount of which is set at incorporation) towards the company’s debts where it becomes insolvent. This, therefore, limits personal liability of the various members to that fixed guaranteed sum. This type of company is commonly set up for non-profit organizations, with any profit made being reinvested back into the business. As with private company’s limited by shares, the day to day operation of a company limited by guarantee is the responsibility of its directors. a. Enterprises that seek financing from investors, and those which will have multiple owners, are likely to form a private company limited by shares. b. Whilst we don’t have any particular statistics on this (and depending on what the Social Enterprise is intending to achieve), the organizational forms perhaps more suited for a Social Enterprise would be a private company limited by guarantee or a Community Interest Company.
Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required...	Where a company has specific objects they are required to consider them and ensure the company acts within and in accordance with those objects (it is likely that all Social Enterprises will have specific objects driven by social, societal or environmental factors which the directors must have regard to when managing the company). In addition, under their statutory duties (contained within the Companies Act 2006), the board of directors of any traditional organizational form has a duty to promote the success of the company. This means the directors must act in good faith and in a way they consider would most likely promote the success of the company for the benefit of its shareholders as a whole. In doing so, directors are advised to have regard (among other matters) to the interests of company employees, the need to foster business relationships with suppliers and customers, the impact of the company's operations on the community and the environment and the desirability of the company maintaining a reputation for high standards of business conduct.
Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so:a. What type(s) of organizational forms are they?b. How do they materially differ from the most closely analogous traditional organizational ...	There is no organizational form which Social Enterprises must specifically use in Northern Ireland. As such, there are a multitude of forms a Social Enterprise may take, namely: a private limited company, a private company limited by guarantee, a registered charity, a charitable incorporated organization, a community interest company, a co-operative & community benefit society, a credit union, sole trader or business partnership. Again whilst there is no organizational form specifically for Social Enterprises, forms such as community interest companies or private companies limited by guarantee are perhaps best suited as they generally focus on profit retention within the company so as to ensure such profits are used in furtherance of the social or environmental purpose for which the entity is incorporated. Taking specifically the community interest company model, there are various benefits as follows: such entities have a clear commitment to social goals as set out in their constitution (which should give greater reassurance to investors and the wider public as to the purpose and integrity of the entity); greater access to certain forms of finance, for example, some donors will only give to charities or community interest companies because of the protections these entities provide in terms of funds being used for the stated purpose; limited liability for those running and operating the business; it is a familiar company structure, complete with directors and shareholders, which can simplify and expedite the process of setting up and operating the organization (as opposed to a registered charity, which can be more complicated); there are reduced governance requirements. Whilst these entities are governed by the CIC Regulator, the regulation is lighter touch (when compared to registered charities), with the main requirement being the submission of the annual Community Interest Report; and this model can provide better continuity of purpose. A community interest company has its own legal status and will therefore continue in operation – and able to provide benefit to the community – until it is dissolved or converted into a charity. Even after dissolution, a specific feature of the CIC model is that any residual assets (after paying off any creditors) must be transferred to another asset-locked body, like another CIC or a charity. This ensures that funds invested in a CIC will continue to benefit social or charitable ends, even after the dissolution of that entity. In terms of other key restrictive features of community interest companies, the company constitution must contain an asset lock provision that provides a legal promise that the company’s assets will only be used for its social objectives. More particularly, the constitution must specify that the community interest company cannot transfer its assets (including any profits or other surpluses generated by its activities) for less than market value unless transferring them to another CIC or charity (that is either specified in its or articles or consented to by the Regulator) or if the transfer is for the benefit of the community it was set up to serve. In addition, community interest companies must be subject to an aggregate dividend cap whereby (subject to the usual Companies Act requirements) up to a maximum of 35% of the company’s distributable profits in a single year can be paid out in dividends to its shareholders. Unlike most forms of company, community interest companies may only declare a dividend by ordinary or special resolution of the members or, in other words, directors cannot declare a dividend without shareholder approval. We would reiterate that there is no prescribed legal form that a social enterprise must take in the UK/Northern Ireland (see above the various legal forms that a social enterprise may take), however again community interest companies are one of the most suitable company structures (for the reasons outlined above) where social enterprise and community benefit is at the core of the relevant organization’s purpose.
Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporat...	Yes, Social Enterprises can be structured as a for-profit or non-profit. a. No there is no differential treatment. b. There is no distinction between non-profits that are Social Enterprises and non-profits that are not Social Enterprises. c. No. d. We don’t have any statistics on this but in practice, we would generally see Social Enterprises as non-profits.
Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms.	Yes, worker-controlled co-operatives are permitted in Northern Ireland. The operation of the co-operative is dependent upon their written rules. Co-operatives are run for the mutual benefit of their members (which can be based upon the common economic, social and cultural needs or interests of the members) and are subject to less stringent regulations than a limited company. They are however still required to produce an annual return and annual audit to the Financial Conduct Authority along with other matters throughout the year.
Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to.	This will depend on the organizational form selected for the Social Enterprise. For example, a social enterprise incorporated as a “Community Interest Company” must deliver to the Registrar of Companies on an annual basis: (1) accounts; (2) an annual return/confirmation statement; and (3) a community interest company report. Notably, the community interest report is required to show that the relevant community interest company still satisfies the “Community Interest Test”, that being that it is engaging appropriately with its stakeholders in carrying out activities that benefit the community. The regulator for Community Interest companies in the UK is the Office of the Regulator of Community Interest Companies. We would also note that Social Enterprise NI is a representative body of Social Enterprises in Northern Ireland.
In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples.	No
Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe.	No. However, guidance may be issued by the Charities Commissioner for Northern Ireland or the Community Interest Companies Regulator.
Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe.	No.
Does your jurisdiction have any ESG requirements for investors? If it does, please describe.	No.
Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements.b. If they are not, are they permi...	In respect of UK pension funds, trustees must outline their approach to the voting of their shares in investee companies, and how they take account of financially material matters, including ESG and climate change considerations. Aside from this, investors will inevitably consider the more traditional things like: (i) do the interests of the company align with the philosophies of the investor; (ii) are the individuals operating the company worth investing in etc.
What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)?	Social Enterprises usually get their funding by way of grants, philanthropic investment and traditional investment.
How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)?	Impact investment activity has seen a steady increase in the UK over the past decade, however (as with most sectors) this has been adversely affected by COVID.
What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government...	The following are examples of quasi-governmental entities which provide loan support to Social Enterprises in Northern Ireland: Social Enterprise NI; The Ulster Community Investment Trust; and The NI Council for Voluntary Action. There was also a COVID Social Enterprise fund set up by the Northern Ireland executive to support Social Enterprises however this fund closed in October 2020. a. The difficulty in obtaining government funding would be dependent on the prevailing situation in the economy at the time and the availability and satisfaction of due diligence by the government on the social enterprise. b. The government bodies referenced above would generally only fund Social Enterprise companies (albeit note there is no specific organizational form that a Social Enterprise should take in NI as highlighted above).
Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)?	Northern Ireland does not have a securities exchange.
To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction.	N/A
How prevalent, if at all, are impact bonds in your jurisdiction?	There is a lot of interest surrounding impact bonds, however, in practice they are not as prevalent
In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)?	None that are unique to Social Enterprises as far as we are aware.
Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under a...	Crowdfunding is not illegal in Northern Ireland, however, only certain crowdfunding activities are regulated. Donation-based and rewards-based crowdfunding are not regulated, whereas firms carrying on activities associated with loan-based or investment-based crowdfunding may require FCA authorization under the Financial Services and Markets Act 2000.
Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe.	No.
What government operational support, resources, training or services, are available for small businesses or Social Enterprises?	The Northern Ireland government provides a range of tailored supports for enterprises of all sizes in Northern Ireland. Supports include access to finance, management development, mentoring supports, business development programs, innovation research and development support and other skills training. Invest NI is also a prevalent supporter of businesses of all sizes in Northern Ireland, with a particular focus on start-ups and SMEs. This support ranges from grant support to mentoring and general business development support.
Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are.	This will depend on the organizational structure chosen. For example, and as noted above, Community Interest Companies must file a community interest report on an annual basis to ensure they can retain their community interest status. This is not something that a private company limited by shares would have to file.
Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness.	The Department for the Economy leads on the development of Social Enterprise in Northern Ireland. A key focus is to boost Northern Ireland’s strong entrepreneurial tradition and support “continued investment in Social Enterprise growth”. The effectiveness of this can be seen in the success had by NI based Social Enterprises in the annual UK wide awards in areas such as “Education and Training Social Enterprise”, “Women in Social Enterprise”. In addition, there are quasi-governmental organizations such as Social Enterprise NI, The Ulster Community Investment Trust and the NI Council for Voluntary Action which all offer support (as described above) for Social Enterprises.
Is there a different bankruptcy system available for Social Enterprises?	No.
What are the average time and filing fees to form an Enterprise in your jurisdiction?	A hard-copy postal application to incorporate a company at Companies House can take between 8-10 working days. However, an online application can be returned within 24 hours. The fee for incorporating a company online is (generally speaking) £12, while a hard-copy postal application costs £40. Note guaranteed same day incorporation is £30 online and £100 in paper format, however, note all same day services have been suspended due to COVID.
What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well...	The only beneficial status is charitable exempt status, if awarded.
Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction.	Yes, startups and other entrepreneurial enterprises can easily form and flourish in Northern Ireland and the UK. There are a number of schemes, both government organized and privately organized which provide support to startups and encourage growth throughout the company’s existence. Invest NI is a key supporter of startup businesses and offers both financial and other practical business development support as described above. In addition, the organization “Catalyst” is a hub for young entrepreneurs and startups and it provides a range of guidance and mentoring support (from those already in the industry) for those embarking on the journey of running their own business.
Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction.	Yes, Social Enterprises can easily form and flourish in Northern Ireland and the UK. There are a number of supporting bodies as described above, with Social Enterprise NI acting as a representative and support network for Social Enterprises. Further, the Department for the Economy and the Department for Communities is fully engaged in helping Social Enterprises to succeed, which is evident through the recent launch of the COVID support fund.
Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Soc...	We would be of the view that there is nothing (legislatively) obstructing the formation of Social Enterprises and there appears to be a concerted effort at the government level to promote and support such organizations.
In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects.	No.
What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction?	A dedicated legal form for Social Enterprises would make the path clearer for those wishing to start such an enterprise.
What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)?	Whilst companies each have their own mission to survive and prosper in what is a very challenging economic period, perhaps placing more of an onus on directors (via statute or regulation) to factor in ESG matters more heavily in their decision making progress would lead to a more ESG conscious organization.
Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not?	No.

Social Enterprise Law Surveys

Back XLS

What jurisdiction(s) do you practice in?

Northern Ireland

What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade ...

The most commonly used for-profit corporate organizational form in Northern Ireland is a limited liability company as set out below:

Private company limited by shares: A company limited by shares is incorporated with issued share capital, whereby shares in the company are issued to shareholders representing (in general terms) each shareholder’s percentage ownership and voting control over the entity. In addition, the share percentage also (again generally speaking, although this can differ in specific companies) represents a shareholder's entitlement to the company’s profits as well as their personal financial liability for the company’s debts. Note directors are also appointed to manage the day to day running of the company.
Private company limited by guarantee: A company limited by guarantee is set up with no share capital. Instead, the relevant members act as guarantors who each agree to pay a fixed sum of money (the amount of which is set at incorporation) towards the company’s debts where it becomes insolvent. This, therefore, limits personal liability of the various members to that fixed guaranteed sum. This type of company is commonly set up for non-profit organizations, with any profit made being reinvested back into the business. As with private company’s limited by shares, the day to day operation of a company limited by guarantee is the responsibility of its directors.

a. Enterprises that seek financing from investors, and those which will have multiple owners, are likely to form a private company limited by shares.

b. Whilst we don’t have any particular statistics on this (and depending on what the Social Enterprise is intending to achieve), the organizational forms perhaps more suited for a Social Enterprise would be a private company limited by guarantee or a Community Interest Company.

Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required...

Where a company has specific objects they are required to consider them and ensure the company acts within and in accordance with those objects (it is likely that all Social Enterprises will have specific objects driven by social, societal or environmental factors which the directors must have regard to when managing the company).

In addition, under their statutory duties (contained within the Companies Act 2006), the board of directors of any traditional organizational form has a duty to promote the success of the company. This means the directors must act in good faith and in a way they consider would most likely promote the success of the company for the benefit of its shareholders as a whole. In doing so, directors are advised to have regard (among other matters) to the interests of company employees, the need to foster business relationships with suppliers and customers, the impact of the company's operations on the community and the environment and the desirability of the company maintaining a reputation for high standards of business conduct.

Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so:a. What type(s) of organizational forms are they?b. How do they materially differ from the most closely analogous traditional organizational ...

There is no organizational form which Social Enterprises must specifically use in Northern Ireland. As such, there are a multitude of forms a Social Enterprise may take, namely: a private limited company, a private company limited by guarantee, a registered charity, a charitable incorporated organization, a community interest company, a co-operative & community benefit society, a credit union, sole trader or business partnership.

Again whilst there is no organizational form specifically for Social Enterprises, forms such as community interest companies or private companies limited by guarantee are perhaps best suited as they generally focus on profit retention within the company so as to ensure such profits are used in furtherance of the social or environmental purpose for which the entity is incorporated.

Taking specifically the community interest company model, there are various benefits as follows:

such entities have a clear commitment to social goals as set out in their constitution (which should give greater reassurance to investors and the wider public as to the purpose and integrity of the entity);
greater access to certain forms of finance, for example, some donors will only give to charities or community interest companies because of the protections these entities provide in terms of funds being used for the stated purpose;
limited liability for those running and operating the business;
it is a familiar company structure, complete with directors and shareholders, which can simplify and expedite the process of setting up and operating the organization (as opposed to a registered charity, which can be more complicated);
there are reduced governance requirements. Whilst these entities are governed by the CIC Regulator, the regulation is lighter touch (when compared to registered charities), with the main requirement being the submission of the annual Community Interest Report; and
this model can provide better continuity of purpose. A community interest company has its own legal status and will therefore continue in operation – and able to provide benefit to the community – until it is dissolved or converted into a charity. Even after dissolution, a specific feature of the CIC model is that any residual assets (after paying off any creditors) must be transferred to another asset-locked body, like another CIC or a charity. This ensures that funds invested in a CIC will continue to benefit social or charitable ends, even after the dissolution of that entity.

In terms of other key restrictive features of community interest companies, the company constitution must contain an asset lock provision that provides a legal promise that the company’s assets will only be used for its social objectives. More particularly, the constitution must specify that the community interest company cannot transfer its assets (including any profits or other surpluses generated by its activities) for less than market value unless transferring them to another CIC or charity (that is either specified in its or articles or consented to by the Regulator) or if the transfer is for the benefit of the community it was set up to serve.

In addition, community interest companies must be subject to an aggregate dividend cap whereby (subject to the usual Companies Act requirements) up to a maximum of 35% of the company’s distributable profits in a single year can be paid out in dividends to its shareholders. Unlike most forms of company, community interest companies may only declare a dividend by ordinary or special resolution of the members or, in other words, directors cannot declare a dividend without shareholder approval.

We would reiterate that there is no prescribed legal form that a social enterprise must take in the UK/Northern Ireland (see above the various legal forms that a social enterprise may take), however again community interest companies are one of the most suitable company structures (for the reasons outlined above) where social enterprise and community benefit is at the core of the relevant organization’s purpose.

Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporat...

Yes, Social Enterprises can be structured as a for-profit or non-profit.

a. No there is no differential treatment.

b. There is no distinction between non-profits that are Social Enterprises and non-profits that are not Social Enterprises.

c. No.

d. We don’t have any statistics on this but in practice, we would generally see Social Enterprises as non-profits.

Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms.

Yes, worker-controlled co-operatives are permitted in Northern Ireland. The operation of the co-operative is dependent upon their written rules. Co-operatives are run for the mutual benefit of their members (which can be based upon the common economic, social and cultural needs or interests of the members) and are subject to less stringent regulations than a limited company. They are however still required to produce an annual return and annual audit to the Financial Conduct Authority along with other matters throughout the year.

Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to.

This will depend on the organizational form selected for the Social Enterprise. For example, a social enterprise incorporated as a “Community Interest Company” must deliver to the Registrar of Companies on an annual basis: (1) accounts; (2) an annual return/confirmation statement; and (3) a community interest company report. Notably, the community interest report is required to show that the relevant community interest company still satisfies the “Community Interest Test”, that being that it is engaging appropriately with its stakeholders in carrying out activities that benefit the community.

The regulator for Community Interest companies in the UK is the Office of the Regulator of Community Interest Companies. We would also note that Social Enterprise NI is a representative body of Social Enterprises in Northern Ireland.

In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples.

Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe.

No. However, guidance may be issued by the Charities Commissioner for Northern Ireland or the Community Interest Companies Regulator.

Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe.

No.

Does your jurisdiction have any ESG requirements for investors? If it does, please describe.

No.

Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements.b. If they are not, are they permi...

In respect of UK pension funds, trustees must outline their approach to the voting of their shares in investee companies, and how they take account of financially material matters, including ESG and climate change considerations.

Aside from this, investors will inevitably consider the more traditional things like: (i) do the interests of the company align with the philosophies of the investor; (ii) are the individuals operating the company worth investing in etc.

What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)?

Social Enterprises usually get their funding by way of grants, philanthropic investment and traditional investment.

How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)?

Impact investment activity has seen a steady increase in the UK over the past decade, however (as with most sectors) this has been adversely affected by COVID.

What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government...

The following are examples of quasi-governmental entities which provide loan support to Social Enterprises in Northern Ireland:

Social Enterprise NI;
The Ulster Community Investment Trust; and
The NI Council for Voluntary Action.

There was also a COVID Social Enterprise fund set up by the Northern Ireland executive to support Social Enterprises however this fund closed in October 2020.

a. The difficulty in obtaining government funding would be dependent on the prevailing situation in the economy at the time and the availability and satisfaction of due diligence by the government on the social enterprise.

b. The government bodies referenced above would generally only fund Social Enterprise companies (albeit note there is no specific organizational form that a Social Enterprise should take in NI as highlighted above).

Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)?

Northern Ireland does not have a securities exchange.

To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction.

N/A

How prevalent, if at all, are impact bonds in your jurisdiction?

There is a lot of interest surrounding impact bonds, however, in practice they are not as prevalent

In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)?

None that are unique to Social Enterprises as far as we are aware.

Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under a...

Crowdfunding is not illegal in Northern Ireland, however, only certain crowdfunding activities are regulated. Donation-based and rewards-based crowdfunding are not regulated, whereas firms carrying on activities associated with loan-based or investment-based crowdfunding may require FCA authorization under the Financial Services and Markets Act 2000.

Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe.

No.

What government operational support, resources, training or services, are available for small businesses or Social Enterprises?

The Northern Ireland government provides a range of tailored supports for enterprises of all sizes in Northern Ireland. Supports include access to finance, management development, mentoring supports, business development programs, innovation research and development support and other skills training.

Invest NI is also a prevalent supporter of businesses of all sizes in Northern Ireland, with a particular focus on start-ups and SMEs. This support ranges from grant support to mentoring and general business development support.

Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are.

This will depend on the organizational structure chosen. For example, and as noted above, Community Interest Companies must file a community interest report on an annual basis to ensure they can retain their community interest status. This is not something that a private company limited by shares would have to file.

Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness.

The Department for the Economy leads on the development of Social Enterprise in Northern Ireland. A key focus is to boost Northern Ireland’s strong entrepreneurial tradition and support “continued investment in Social Enterprise growth”. The effectiveness of this can be seen in the success had by NI based Social Enterprises in the annual UK wide awards in areas such as “Education and Training Social Enterprise”, “Women in Social Enterprise”.

In addition, there are quasi-governmental organizations such as Social Enterprise NI, The Ulster Community Investment Trust and the NI Council for Voluntary Action which all offer support (as described above) for Social Enterprises.

Is there a different bankruptcy system available for Social Enterprises?

No.

What are the average time and filing fees to form an Enterprise in your jurisdiction?

A hard-copy postal application to incorporate a company at Companies House can take between 8-10 working days. However, an online application can be returned within 24 hours. The fee for incorporating a company online is (generally speaking) £12, while a hard-copy postal application costs £40.

Note guaranteed same day incorporation is £30 online and £100 in paper format, however, note all same day services have been suspended due to COVID.

What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well...

The only beneficial status is charitable exempt status, if awarded.

Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction.

Yes, startups and other entrepreneurial enterprises can easily form and flourish in Northern Ireland and the UK. There are a number of schemes, both government organized and privately organized which provide support to startups and encourage growth throughout the company’s existence.

Invest NI is a key supporter of startup businesses and offers both financial and other practical business development support as described above. In addition, the organization “Catalyst” is a hub for young entrepreneurs and startups and it provides a range of guidance and mentoring support (from those already in the industry) for those embarking on the journey of running their own business.

Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction.

Yes, Social Enterprises can easily form and flourish in Northern Ireland and the UK. There are a number of supporting bodies as described above, with Social Enterprise NI acting as a representative and support network for Social Enterprises. Further, the Department for the Economy and the Department for Communities is fully engaged in helping Social Enterprises to succeed, which is evident through the recent launch of the COVID support fund.

Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Soc...

We would be of the view that there is nothing (legislatively) obstructing the formation of Social Enterprises and there appears to be a concerted effort at the government level to promote and support such organizations.

In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects.

No.

What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction?

A dedicated legal form for Social Enterprises would make the path clearer for those wishing to start such an enterprise.

What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)?

Whilst companies each have their own mission to survive and prosper in what is a very challenging economic period, perhaps placing more of an onus on directors (via statute or regulation) to factor in ESG matters more heavily in their decision making progress would lead to a more ESG conscious organization.

Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not?

No.

Social Enterprise Law Surveys

Northern Ireland

Social Enterprise Law Surveys

Northern Ireland

Members