A Guide for Perplexed Scholars, Entrepreneurs, Philanthropists, Leaders, Investors, and Policymakers
Edited by Dennis R. Young, Elizabeth A.M. Searing and Cassady V. Brewer
Chapter 3: The ongoing evolution in social enterprise legal forms
AbstractOnly 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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