The Social Enterprise Inspired by the U.S. Model? The Benefit Corporation Reviewed
Tijdschrift Ondernemingsrecht (Journal on Dutch Corporate Law), 2012/57: May 2012
13 Pages Posted: 18 Jun 2013
Date Written: May 2012
Abstract
This article is about entrepreneurship at the intersection of public and private; entrepreneurship with a public benefit purpose, but practiced with the resources of an entrepreneur. Underlying this form of entrepreneurship is the belief that public goals can be achieved by focusing on efficiency and profitability. Entrepreneurship with such a hybrid purpose is commonly referred to as 'social entrepreneurship'. This hybrid form of entrepreneurship has strongly emerged in recent years. Social entrepreneurs conduct a wide range of businesses; including care, housing, and educational institutions; but also clothing manufacturers, energy companies, Third World (aid) shops, and museums. These hybrid companies use traditional legal forms. Not-for-profit legal forms are unsuitable, due to the absence of the desired profit incentive and limited access to the capital market. However, are traditional for-profit legal forms suitable for achieving the objectives of hybrid social entrepreneurs? Such legal forms are traditionally (primarily) aimed at maximizing profit. Do these legal forms actually provide sufficient flexibility to pursue public benefit objectives? In several states in America, this question has been answered in the negative. In these states, the benefit corporation has been introduced as a customized legal form for social entrepreneurs. On the basis of analysis of the benefit corporation, I formulate some thoughts on a customized legal form for social entrepreneurs, suitable for implementation in Dutch corporate law, with the aim to (further) stimulate the discussion on the usefulness and necessity of such a legal form.
Keywords: social entrepreneurs, legal forms, benefit corporation, entrepreneurship
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