Applying innovative ideas to solve social and environmental problems is certainly the future  of social development. The innovative ideas of InnoTeams and Open Group have been eye-catching in the Zero Carbon Pitch events held so far, and there are many other groups now striving to develop social innovation. However, the road to startup success may be a winding one, full of potential pitfalls. A Master Workshop entitled ‘Green Startups Go’ was held on August 17  , two trailblazers were invited to offer novices in some aspect of business.

The guest speaker at the workshop was Mr William Po, a chartered accountant who has been involved in community service for more than 20 years. His current client portfolio includes more than 90 charities/NGOs and he is well-known in the charity sector. Mr Po introduced different organizational types and explained the procedure for establishing social enterprises, non-profit organizations and charities. Under the current law, there are two basic types of entity – profit making and non-profit making. Profit making companies can include sole proprietorship, partnership and limited companies offering shares. Non-profit making companies include societies, companies limited by guarantee, foreign organizations subsidiaries in Hong Kong and charities. Non-profit organizations are not necessarily equal to charities. A charity is an entity that is registered in Hong Kong and enjoys tax exempt status under Section 88 of the Inland Revenue Ordinance. In addition to its non-profit nature, it has to fulfill one of these functions: create social impact of helping the poverty, education or protecting the environment. There are currently no regulations to specifically cover social enterprise.

When founding an organization, the founders have to decide whether the entity will be profit-making or not, prepare documents such as the entity’s name, objectives, and a Memorandum and Articles of Association. One must pay attention to the time needed for starting different entities and the number of officers. Mr William Po also showed samples of different organizational types for audience’s reference.

After that, Ir Albert Lai, Co-founder of CarbonCare, shared his actual experience in startups. He has established nine entities in and outside of Hong Kong, including both profit-making and non-profit-making ones. He chose two companies that he started in Australia as examples to remind the audience of the importance of customer discovery. He didn’t encourage launching any product or service without understanding the market needs. CarbonCare InnoLab(CCIL) is the latest organization he has established. Since Hong Kong Jockey Club Charities Trust agrees that tackling climate change with innovative solutions is very important, and is willing to fund the CarbonCare Open Innovation Lab program, CCIL became a charity registered as a company limited by guarantee. This example also explained the implication of funding application on the form of entity.

The Master Workshop included many participants who have established or are planning to establish an entity and they were keen to ask questions. These included the difficulties of opening bank accounts for a society, tax issues for non-profit organizations, regulations on transfer of benefits in charity, the handling of multi-purpose objective clauses and the business model for social enterprises. As well as answering all the questions, the two speakers emphasized that an ideal social enterprise should have the ability to be self-reliant and operate independently in order to be sustainable. Mr Po shared his powerpoint with the audience after the meeting. CarbonCare InnoLab recommended A Practical Guide to Setting up a Social Enterprise published by Hong Kong Council of Social Service as an important reference for Hong Kong social enterprise start-ups.