To Be or Not to Be (a Security): Funding For-Profit Social Enterprises

30 Pages Posted: 26 Apr 2013 Last revised: 12 Jun 2013

Joan MacLeod Heminway

University of Tennessee College of Law

Date Written: April 1, 2013

Abstract

This article explores the federal securities law status of financial interests in for-profit social enterprise entities. When analyzed through the lens of the Securities Act of 1933 and the Securities Exchange Act of 1934, financial interests in social enterprise businesses raise both concerns and opportunities. Ultimately, the federal securities regulation status of interests in for-profit social enterprise ventures is important for choice-of-entity reasons (since the regulatory framework may impose different costs on interests in different structural business forms), for capital-structuring reasons within individual forms of entity, and for risk-management reasons at the entity level. In addition, an inquiry into the applicability of federal securities regulation to the funding of social enterprise serves as a catalyst for further thought on the optimal applicability of federal securities regulation to interests in business entities and projects.

Keywords: social enterprise, securities regulation, for-profit entity, corporate finance

JEL Classification: G10, G18, G30, G32, K22, L30, M10, M13, M14

Suggested Citation

Heminway, Joan MacLeod, To Be or Not to Be (a Security): Funding For-Profit Social Enterprises (April 1, 2013). Regent University Law Review, Vol. 25, 2013; University of Tennessee Legal Studies Research Paper No. 211. Available at SSRN: https://ssrn.com/abstract=2256767

Joan MacLeod Heminway (Contact Author)

University of Tennessee College of Law ( email )

1505 West Cumberland Avenue
Knoxville, TN 37996
United States
865-974-3813 (Phone)
865-974-0681 (Fax)

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