Presentation on theme: "Is social enterprise a model for creative organisations? Scottish Charitable Incorporated Organisation (SCIO)"— Presentation transcript:
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: 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?