Governing and Financing Blended Enterprise
Chicago-Kent Law Review, Forthcoming
29 Pages Posted: 23 Feb 2010
Date Written: February 23, 2010
The image of nonprofit and for-profit as dual and exclusive categories is misleadingly simple. This blurring of the boundary between for-profit and nonprofit has gone on for years and appears only to be gaining steam. Yet, traditionally, the law has put organizations to a choice of either the nonprofit or for-profit form of governance. In the first decade of this century, organizational law is beginning to catch up with the boundary-blurring trend. Legislatures are creating new forms for blended enterprise, including several U.S. states’ low-profit limited liability company (the “L3C”) and the community interest company (the “CIC “) in England and Wales. Along with these more formal efforts, at least one self-regulatory scheme provides a framework to fashion a blended form (the “B Corporation”) under traditional state for-profit corporation law. This article describes and compares these forms, evaluating whether they can enhance the governance and finance of blended enterprise.
Keywords: Charity, Nonprofit, Philanthropy, Social Enterprise, L3C, Community Interest Company, B Corporation, Hybrid Organizations
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