The DTI has appointed the head of consumer watchdog Energywatch Scotland, John Hanlon, to regulate Community Interest Companies (CIC).
The department said he would exert a light touch and be independent of government.
Hanlon has previously set up and run social enterprises such as the Dumfries and Galloway Care Trust. Industry and regions minister Jacqui Smith said that he will take up the post in April.
Hanlon will have the power to investigate CICs, remove or appoint directors and ask the courts to wind up companies. But his decisions can be challenged.
An appeals officer, appointed by the Secretary of State for Trade and Industry, can force him to reconsider.
The CIC is the new legal form for social enterprise. Businesses can register as CICs from July and they will have an asset lock to ensure that any profits go back into the business.
"I am very pleased to welcome John as the CIC regulator," said Smith.
"His exceptional experience coupled with over a decade of experience in setting up and running social enterprises will be of great advantage."
Jonathan Bland, chief executive of the Social Enterprise Coalition, said: "The challenge he will face is to fire people's imagination so that in 10 years' time there are CICs operating in many fields - from renewable energy and fair trade to transport and environmental services."