About SEAM

What is Social Enterprise?

Social enterprise is about helping the third sector become as financially sustainable as possible. Here in Midlothian we are very proud to have strong, locally-led social enterprises that provide valued services throughout our towns and villages.

Social enterprises come in many shapes and sizes, from parent-run after school clubs to large housing associations. In Scotland, The Voluntary Code of Practice for Social Enterprise sets out a clear definition of what makes a social enterprise:

  1. A social enterprise is a trading business – selling goods and services – but whose primary objective is to achieve social and/or environmental benefit. Social enterprises are different from those charities and third sector organisations which do not aspire to financial independence through trading.
  2. Regardless of its legal form, the constitution of a social enterprise will include the requirement that profits are reinvested in the business or in the beneficiary community – and not distributed to private owners, shareholders or investors.
  3. The constitution will always require that on dissolution, the assets of the social enterprise are reinvested in another organisation with similar aims and objectives. Taken together, criteria 2 and 3 are referred to as the ‘asset lock’ (the defining characteristic of a SE) which distinguishes it from the private sector.
  4. Social enterprises are constituted and managed in an accountable and transparent way, particularly with regard to the community they serve.
  5. Social enterprises are distinct from the public sector and cannot be the subsidiary of a public body.

For more detailed information about social enterprise you can visit the website of SENScot, the Social Enterprise Network Scotland.