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<p>The Government welcomes the contribution which social enterprises make to local
growth and prosperity in our communities up and down the country. The UK’s company
law framework allows for a variety of business forms, in part to suit those adopting
social or environmental purposes.</p><p> </p><p>We welcome the growth of purposeful
businesses and have taken steps to encourage and enable this trend. The Government
encouraged the business-led development of ‘Purposely’, a tool to help social entrepreneurs
embed purpose into their businesses using the flexibility provided in the Companies
Act; it also established the Inclusive Economy Partnership to harness the power of
business as a force for good in our society; and it has supported the new Impact Investing
Institute to grow social investment.</p><p> </p><p>Community Interest Companies (CICs)
are a huge success story. They are delivering benefits to more and more of our communities
right across the UK. CICs have grown exponentially since 2005. There are now over
17,000 now on the public register. They are promoted by the Regulator of Community
Interest Companies, which is an independent statutory office holder appointed by my
rt. hon. Friend the Secretary of State.</p><p> </p><p>The UK’s corporate governance
framework has been updated to promote purpose in businesses. The UK’s Corporate Governance
Code was revised, with effect from 1 January 2019, to promote the importance of having
a clear corporate purpose. The Governance Principles for Large Private Companies developed
last year by Sir James Wates do the same. Company reporting requirements, also introduced
this year, now require companies to report how they have regard to wider societal
interests within the meaning of Section 172 of the Companies Act.</p>
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