Similarly to running a business, there are several legal considerations and practical steps when running a Social Enterprise. Once you’ve chosen a business structure, there are important measures to take to ensure your Social Enterprise runs effectively.
Forming a Committee or Board
A committee or board is formed after they are elected by the members of the Social Enterprise. They are usually made up of a chairperson or president, treasurer and secretary as well as ordinary committee members. It is important that your committee or board members have the right knowledge and experience to achieve the mission of your Social Enterprise.
A member should be aware of their rights and responsibilities before joining a Social Enterprises which depend on the legal structure and relevant legislation. Their rights include the right to notices of meetings, to attend general meetings, to remove committee members and to access certain records of the organisation. Their responsibilities including electing general members, voting on electing the committee, changing the name, purpose or Constitution, adding the Social Enterprise to an existing organisation, removing an auditor and winding up the organisation voluntarily.
Drafting Rules or Constitution
This requirement depends on the legal structure you have chosen for your Social Enterprise. For example, incorporated associations or companies limited by guarantee are required to have a set of rules or Constitution which will govern the internal affairs of the organisation. Regardless of whether they are legally required, the committee and members will be bound by them so it is important to set out exactly what is needed to run the organisation. This generally includes:
- What the objectives are;
- How new members can join;
- How the committee members are elected;
- How general meetings will be held;
- How the organisation will be governed; and
- What will happen if the organisation is wound up.
The requirement to hold meetings also depends on the structure, but nevertheless, it is an important part of the operations of any Social Enterprise. The meetings are required to include committee meetings for committee members and annual general meetings for members. You must also be aware of what is required once a meeting has been conducted which may include completing and filing forms as well as recording the meeting in some form such as minutes and resolutions.
Registering as a Charity and/or Applying for Tax Concessions
The eligibility of the Social Enterprise to register as a charity and/or applying for tax concessions should be considered when deciding on your legal structure. Regardless, they are practical steps to consider for how you will run your Social Enterprise.
There are many associated risks with running a Social Enterprise but it is important to consider the specific risks that your Enterprise faces to make sure that your insurance provides you with adequate protection. It is also important to speak with a lawyer and determine what legislation applies to your Social Enterprise to ensure you are compliant.
It is important to protect your intellectual property when setting up and running your Social Enterprise which includes your business name and logo. You can do this by registering a Trade Mark in the goods or services class which your Social Enterprise operates in or incorporating intellectual property clauses within your:
- Employee, Contractor or Volunteer Agreements;
- Business Terms and Conditions.
There are many legal and non-legal issues to consider when hiring employees, contractors and volunteers. It is important to have bespoke Agreements between your Social Enterprise and those working within it to cover these issues which may include:
- Permanency (full time, part time, casual and/or fixed term);
- Hours of work;
- Position title and description;
- Fair Work Awards;
- Probation periods;
- Workers Compensation;
- Occupational Health and Safety;
- Confidentiality; and
Terms and Conditions
It is important to have Terms and Conditions to set out the contractual agreement between your Social Enterprise and your customers or clients to protect your rights and further your interests. They should cover a range of issues including:
- Product/Service delivery;
- Payment terms;
- Credit limits and periods;
- Defects and damage;
- Indemnity/Liability; and
Do you need assistance with setting up or running your Social Enterprise? Contact one of our business lawyers on 1300 544 755.