Legal structures

Next it is important to consider which legal structure would work best for your project, as this impacts how you are able to operate.

Selecting the best legal structure for your project:

There are several areas that you need to think about which will help you identify the best legal structure for your project.

• Ownership: Are you the only owner of your project idea?  If the answer is yes self-employment or a limited company may be the answer.
• Management: Are you aiming at being the manager of the enterprise? What degree of involvement will others have in the enterprise?
• Involvement: Are only those who own and manage going to be involved in the initiative? Are there others that may be involved? Could they be the social beneficiaries of your initiative, the wider community, or other stakeholders of the initiative?

Legal structures are defined ultimately by the law, and it is important to understand the advantages and limitations of those structure so that you choose the most appropriate. In general, different models of legal structures have advantages and disadvantages and the aim ought to be to find the one that fits best the aims of the organisation and its operations. See our legal structures table to understand the different options and the pros and cons.

Download the Legal Structures table here.

Legal structures follow what is stipulated by a specific piece of legislation such as Charity Law, Company Law, Partnership Law or Industrial and Provident Societies Law, therefore the working documents that fit the governance of organisations are general and not specific.

In addition to the legal structure a group should consider what type of business model it aims to follow in practice. For example, if the aim of a group is to set up a co-operative way of working benefiting its members they may choose a company by shares, a company limited by guarantee or an industrial and provident society. This is even wider in the concept of a social enterprise where any market related activities with social objectives may become a social enterprise, and this includes charities, partnerships, companies or industrial and provident societies in all their options.