Traidcraft Plc, the fair trade company set up by charity the Traidcraft Foundation, aims to treble its size by raising up to £3.25 million from a share offering.
The decision is an important step for one of the UK's most famous social businesses and means it will no longer be controlled by its sister charity, said chief executive Paul Chandler.
"We've been growing at 40 per cent a year and to maintain that growth we need more capital,
he said, adding that there were growing opportunities for new products and distribution channels.
Traidcraft was founded in 1979 and sells food and craft products sourced from the developing world. It was set up as a business rather than a charity, said Chandler, to show that companies could be both socially responsible and profitable.
Its success has been increasingly imitated in recent years, with supermarkets such as Sainsbury and the Co-op launching their own fair trade products.
When Traidcraft was created, through the sale of shares to individuals, the charity controlled the voting rights. But under the share offering, those rights will be purchased and the new investors will hold the power.
"We want to transfer most of the control to the new shareholders because we would like to be accountable to our investors,