Third Sector
The Third Sector is a growing and vital area of business in Scotland today. For BTO, the focus of our Third Sector team is on social enterprises and social firms, supported by our Charity, Corporate, Employment and Social Housing teams.
Our Third Sector team draws on BTO’s corporate and business acumen, as well as our experience of working in the Third Sector over a number of years, to address relevant issues for clients operating in this area.
The team includes specialists in employment, corporate and governance issues, as well as contract issues and other matters of day-to-day concern to Third Sector organisations. Further, many Third Sector organisations either work with charities, or are themselves registered charities and our dedicated charities team also advise in this sector.
Our multifaceted team collaborates to achieve commercial solutions for clients and if a solution cannot be found or agreed, BTO’s litigators are experienced in seeking judicial remedies.
The team also works closely with Social Enterprise Network Scotland (SENScot), the national support body for Social Enterprises and Social Firms in Scotland. BTO assisted SENScot in its merger with Social Firms Scotland in 2020. A Social Firm is a social enterprise that focuses on work integration, so their social purpose is to create employment opportunities and provide a supportive working environment for people who are severely disadvantaged in the labour market.
As a core partner in the “Acquiring Business for Good” programme, which ran from 2009 to 2012, BTO worked with Social Firms Scotland providing support across Scotland for various purchases of private businesses and their conversion into social or community enterprises.
Social enterprises are businesses that trade for social and environmental purposes, operating in all markets. Social enterprises exist to make a profit, but instead of paying dividends to shareholders, any profits or surpluses made are reinvested into social and environmental purposes, for example, providing employment opportunities to the long term unemployed. Without making a profit, social enterprises cannot meet their community benefit objectives and be sustainable.
Contacts:
Alastair Dunn, Partner: akd@bto.co.uk / 0141 221 8012
Michael Cox, Senior Associate: mxc@bto.co.uk / 0131 222 2939
Experience
- Merger of social enterprise bodies
Acted in the merger of SENScot with Social Firms Scotland, advising on all stages of the process from due diligence and TUPE to the transfer agreement and all charity regulatory consents. Achieved a transfer on 1 July 2020, having negotiated the complications of general meetings and concluding contracts under Covid restrictions.
- Development of proposed new community interest company
Our client has been working with other third sector organisations in its area on a project to support recycling of food that would otherwise go to waste, and other environmental aims. We advised on setting up a separate entity as a social enterprise intended to deliver these ambitious plans. We drafted a constitution for the new entity, as a community interest company, and liaised with the client regarding the statutory details required for registration of such a company.
- Advice to Development Trust
We advised a Development Trust regarding acquisition of land for a community garden facility and other amenities to further the Trust’s core activities. Initially, the client was to purchase the land from the Council. However, the Council had acquired the land through compulsory purchase and faced a challenge to their title which led them to offer a lease instead. The lease was delayed due to the ongoing challenge, putting our client’s activities, and agreed funding, at risk. We advised on the issues and worked with our client to negotiate and finalise a lease from the Council taking into account the unusual nature of the title concerns and ensured that the lease was in place and funding was not withdrawn.
- CIC and charity advice
Our clients sought advice about issues arising if a charity, were to become a parent body with an existing community interest company (CIC) as its subsidiary. We provided appropriate constitutional documentation and a draft Group Agreement tailored to give effect to the intentions of the parties.
- Advice to other lawyers
Other legal firms seek our specialist input on corporate, governance, charity, social enterprise, community benefit, co-operative, and community interest company matters.
- Funding arrangements
Advised various charitable and community-based organisations to negotiate and finalise funding arrangements with The Big Lottery and with the local authority, as administrator of Scottish Government funding. Often such grant funding requires not only a grant agreement, but also security to be granted by our clients, and where there is more than one funder, a ranking agreement to ensure key funders receive the ranking they require to release funds.
- Setting up a SCIO for an international network
Our client provides an international network for organisations working in countries worldwide to support whistleblowing and address corruption, waste, fraud, abuse, illegality and threats to the public interest. They sought assistance to incorporate and register as a charity. We provided in depth advice on constitutional options, the requirements of charity registration, drafted a tailored constitution, assisted to complete the status application, and achieved charity registration in time for the charity to obtain the funding it was seeking.
- Setting up a charity with a trading subsidiary
Assisted a newly created urban regeneration company (URC), a company limited by guarantee, set up as a charity with a trading subsidiary, and among other things advised on community benefit provisions to ensure that the URC’s goals of improving employment opportunities and encouraging working with a sustainable community enterprise were achieved.
- Bespoke employment law and practice training for employers
Assisting a number of third sector clients and organisations in dealing with ongoing employment law issues.
