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Social Firm

General characteristics

A specific business form promoted by Social Firms UK to create employment opportunities for disabled people.

Ownership: social firms may demonstrate a range of ownership models. Co‑operatives will be owned by the disabled beneficiaries themselves; in other circumstances a social firm may be owned by trustees or even privately. In most cases members are not beneficial owners and do not personally have any access to the organisation's income or assets.

Charitable status : some social firms are eligible for charitable status if they meet usual criteria.

Examples of use

Social firms demonstrate varying degrees of employee participation and thus self-help on the part of the disabled beneficiaries. Some are structured and self-managed as co‑operatives, others are managed by a board on behalf of the beneficiaries.

Legal forms used

The company limited by guarantee and industrial and provident society (co‑operative) are promoted as standard models but a social firm could take any legal form.

Profit distribution

May vary according to legal form adopted.

Participation issues

The main area of consideration is the degree to which the beneficiary employees are involved in management of the company that employs them. According to Social Firms UK "employee participation methods should meet the varied needs of the workers". Account has to be taken of capacity issues amongst the beneficiary group. If charitable status is to be sought, this will impact on the degree of participation that may be possible.

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