Frequently Asked Questions
What is a social enterprise?
A social enterprise is a business with a stated social aim(s) and with ownership and control by the stakeholders.
What is a co-operative?
A co-operative is a business that is democratically owned and controlled by the people who work in it or, in terms of membership co-operatives, the people who use it.
Co-operative businesses therefore belong to the employees or members of the enterprise.
How do social enterprises and co-operatives differ?
A co-operative is a specific type of social enterprise founded on a distinctive set of
co-operative values and principles.
How many people are needed to set up a co-op or a social enterprise?
Two people can start a co-op although three is the preferred minimum. Any one person can start a social enterprise.
Does everyone in a co-op need to be paid the same amount?
No. The co-op members decide their wages policy.
Can co-ops make a profit?
Yes. Workers’ co-operatives exist to make a living for the people in them and also to make a profit and be sustainable. Co-operatives operate under different principles from other businesses but these principles are only of use if the co-op continues to exist through making and re-investing profit.
Who makes the decisions?
The people in control of a co-operative business are the co-op members, who make overall policy decisions at members meetings. In most small co-ops all the members are directors. In larger co-ops the members may elect some of their number as Directors to make day-to-day management decisions. The Directors may delegate some management tasks to individual staff. These staff members are answerable to the Directors and the Directors are answerable to the members and so the members have the last word.
Can we be a limited company as well as a co-op?
Yes. The most common legal structure for a co-op is a company limited by guarantee. This structure provides members with a guarantee that they are only liable for a nominal sum, usually £1 in the event for the company winding up and having to pay off debts.
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