Mr. Chris Gordon:

In regard to how social enterprises trade at present, a considerable number of organisations are set up under existing company laws. Trading companies are established as companies limited by guarantee or by share capital and they subsequently apply for charitable status. The difficulty with that approach is that it is subject to a number of constraints. Double taxation issues arise when it comes to trading services and products.

Many co-operatives exist under co-operative legislation such as the Industrial and Provident Societies Act 1893 and the Friendly Societies Act 1936. I understand these Acts are under review. Most companies that are set up to trade as co-operatives are advised to become limited companies and use co-operative rules. What we mean by the word "co-operative" is that every person has one vote regardless of share capital or money invested. In the Irish Export Co-operative, members join for €30 per year and the membership elects a board of directors of the limited company. This allows for oversight from the Companies Acts and the Office of the Director of Corporate Enforcement.

The Forfás report estimates there are 1,400 social enterprises employing 25,000 to 33,000 people. We believe there are many more that do not subscribe to the label "social enterprise" and, for the most part, trade as companies limited by guarantee or share capital. However, given that the potential for this sector is in the region of 65,000 people, we are falling behind in social enterprise largely because the mechanisms are not available. I hope we do not fall further behind because we can lead in this area. Social enterprise could be a part of our DNA. We already have strong co-operatives. Everybody is a member of a credit union and other organisations. However, aside from credit unions, agricultural co-operatives and water schemes, co-operatives are not common in Ireland compared with the UK, which has a variety of member owned organisations that offer stability to their members, as opposed to a small number of directors or shareholders.