Notes
1 See Robert H. Gertner, “The Organization of Social Enterprises,” Annual Review of Economics, vol. 15, 2023.
2 Two recent OECD reports describe the utility of social enterprise identifiers developed by various jurisdictions and offer advice and best practices for policy makers considering similar efforts. See OECD, Designing Legal Frameworks for Social Enterprises: Practical Guidance for Policy Makers, Paris: OECD Publishing, 2022, which explains that legal frameworks “legitimise social enterprises and enlarge the legal concept of ‘enterprise’ to entities that twin an entrepreneurial approach with social and increasingly environmentally motivated missions.” See also OECD, Policy Guide on Legal Frameworks for the Social and Solidarity Economy, Paris: OECD Publishing, 2023, which describes how legal frameworks for social enterprises, as well as other institutions within the larger social and solidarity economy, can aid the development of this sector and facilitate its access to both capital and public support.
3 See Dana Brakman Reiser and Steven A. Dean, Social Enterprise Law: Trust, Public Benefit, and Capital Markets, New York: Oxford University Press, 2017; Sofie Cools, “Social Entrepreneurship: The Choice Between Labels, Variants, Dedicated and Conventional Corporate Forms,” European Company and Financial Law Review, vol. 20, no. 1, 2023.
4 Under the auspices of the International Academy of Comparative Law, my colleagues Steven A. Dean and Giedre Lideikyte-Huber and I assembled a group of experts to investigate social enterprise law in more than two dozen jurisdictions. We asked each national expert to report on the legal approaches being deployed in their jurisdiction to identify, incentivize, and regulate entities that use business methods to achieve social goals. Their reports, along with a comprehensive global analysis and additional reports on issues that transcend national borders, are published in Dana Brakman Reiser, Steven A. Dean, and Giedre Lideikyte-Huber, eds., Social Enterprise Law: A Multijurisdictional Comparative Review, Cambridge, United Kingdom: Intersentia, 2023. The findings discussed here, as well as references to the practices of particular nations, are based on the reports contained in this volume.
5 See Henry Hansmann, “The Role of Nonprofit Enterprise,” The Yale Law Journal, vol. 89, no. 5, 1980.
6 See, e.g., Social Enterprise Mark CIC, “Social Enterprise Mark - Eligibility Criteria” (“[a] social enterprise must be primarily dedicated to social objectives”); Social Traders, “Social Enterprise Certification: Guidance Notes and Standards” (requiring “public/community benefit [to] outweigh … private benefit”).
7 See Social Traders, “Social Enterprise Certification.”
8 B Impact Assessment Knowledge Base, “Can Nonprofits Become Certified B Corps?”
9 See Carol Liao, “Social Enterprise Law: Friend or Foe to Corporate Sustainability?,” in Beate Sjåfjell and Christopher M. Bruner, eds., Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability, Cambridge, United Kingdom: Cambridge University Press, 2019; Brett McDonnell, “Benefit Corporations and Strategic Action Fields or (The Existential Failing of Delaware),” Seattle Law Review, vol. 39, no. 2, 2016.
10 See also Janelle A. Kerlin, “Defining Social Enterprise: A Conceptual Framework Based on Institutional Factors,” Nonprofit and Voluntary Sector Quarterly, vol. 42, no. 1, 2013.
11 See, e.g., Ākina, “Impact Certification.”
12 UK Companies (Audit, Investigations and Community Enterprise) Act, § 35(1), 2004.
13 Delaware General Corporate Law § 365.
14 See Ellen Berrey, “Social Enterprise Law in Action: Organizational Characteristics of U.S. Benefit Corporations,” Transactions: The Tennessee Journal of Business Law, vol. 20, 2018 (6 percent compliance rate); J. Haskell Murray, “An Early Report on Benefit Reports,” West Virginia Law Review, vol. 118, no. 1, 2015 (8 percent compliance rate); compare Maxime Verheyden, “Public Reporting by Benefit Corporations: Importance, Compliance, and Recommendations,” Hastings Business Law Journal, vol. 14, no. 1, 2018 (reporting compliance rates in Delaware (8 percent), Colorado (11), Oregon (14), and Minnesota, where the statute unusually penalizes noncompliance (100 percent)).
15 See OECD, Designing Legal Frameworks (noting that improved legal frameworks for social enterprise can assist in targeting “tax incentives, public procurement, and financial and non-financial assistance and benefits” to them).
16 See City of Philadelphia, “Sustainable Business Tax Credit.”
17 See HM Revenue & Customs, “Tax Relief for Investors Using Venture Capital Schemes,” October 6, 2023; HM Treasury, “Social Investment Tax Relief: Call for Evidence,” March 23, 2021.
18 See Cook County Chief Procurement Officer, “Social Enterprise Preference” (5 percent bid preference for benefit corporations); Los Angeles County Consumer Business Affairs, “Small Business: Social Enterprise” (to bids from benefit corporations or certified B Corps even if they exceed competitors’ bids by up to $150,000).