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Community Enterprise (or Business)

General characteristics

A democratic, membership organisation where membership is open to all those who live (and sometimes those who work) in the area served. The aims of a community enterprise are to provide local services and/or create employment for local people.Control is normally exercised on a one member, one vote basis, and the governing body is elected by and from the membership.

Ownership: a community enterprise is owned by its members who are drawn from the community served, although members do not personally have any access to the enterprise's income or assets.

Charitable status: a community enterprise will not normally be eligible for charitable status, though some may achieve this if their trading activity falls within legally charitable purposes (e.g. care for the elderly).

Examples of use

Community enterprises will usually be found providing local services that are unattractive to the private sector because of low profit margins, including community property management (such as workspaces), care services, village shops, security, and community transport.

Legal forms used

Most are either companies limited by guarantee or societies for the benefit of the community.

Profit distribution

No profits or assets may be distributed amongst the members.

Participation issues

Community enterprises are membership organisations and thus will feature internal democratic participatory activities. As community enterprises have to trade successfully to survive, they will also need to engage with their customers/clients, suppliers and others.

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