The Social Enterprise Zoo

The Social Enterprise Zoo

A Guide for Perplexed Scholars, Entrepreneurs, Philanthropists, Leaders, Investors, and Policymakers

Edited by Dennis R. Young, Elizabeth A.M. Searing and Cassady V. Brewer

The Social Enterprise Zoo employs the metaphor of the zoo to gain a more comprehensive understanding of social enterprise – especially the diversity of its forms; the various ways it is organized in different socio-political environments; how different forms of enterprise behave, interact, and thrive; and what lessons can be drawn for the future development and study of organizations that seek to balance social or environmental impact with economic success. Recommended for students, researchers, policymakers, entrepreneurs and managers of social purpose organizations.

Chapter 3: The ongoing evolution in social enterprise legal forms

Cassady V. Brewer

Subjects: business and management, entrepreneurship, social entrepreneurship, non-profits

Abstract

Only two jurisdictions in the world legally define the term “social enterprise.” Even within these leading jurisdictions, the definition generally serves only government certification and limited regulatory purposes. The definition does not establish a distinct, exclusive form of legal entity for social enterprise. Currently then, most social entrepreneurs choose their desired legal entity from among conventional forms: nonprofit, for-profit, and cooperative. The form of legal entity thus cannot serve as a bellwether for social enterprise. Nevertheless, because the legal desires of many social entrepreneurs differ significantly from the legal attributes offered by conventional forms, business law around the world is changing. A number of jurisdictions have modified the conventional legal attributes of cooperative legal forms to accommodate social enterprise. Moreover, at least five jurisdictions (Canada, France, Italy, the United Kingdom, and the United States) have taken the further step of authorizing distinct, for-profit, noncooperative, hybrid legal forms for social enterprise. Accordingly, this chapter provides relevant historical and current information on conventional legal forms as well as emerging “hybrid” forms used by social enterprise organizations. More importantly, this chapter demonstrates how an understanding of conventional as well as emerging hybrid legal forms supports and informs the zoo metaphor.

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