Producing Better Mileage: Advancing the Design and Usefulness of Hybrid Vehicles for Social Business Ventures

Abstract

Since 2008 approximately half of the states in the U.S. have enacted statutes permitting “hybrid” business forms that blend aspects of traditional for-profit ventures with characteristics normally associated with traditional non-profit entities. This article analyzes theoretical, academic, practical, legal, and regulatory questions regarding the extent to which the existing hybrids are suited to achieving social purposes objectives, including in comparison to modified traditional forms of business organization. Finding the current fleet of hybrids an innovative, useful start, but with need to evolve, this article proposes statutory language (set forth in a detailed appendix, and summarized in the article text), and regulatory policies, including in the areas of general oversight, tax, and securities regulation, for a next iteration of hybrid — a “Social Primacy Company” designed to provide more clarity in the marketplace for socially-conscious investors.

Keywords: social enterprise, hybrid forms, benefit corporation, b corps, social purpose corporation, l3c, low profit limited liability company, program related investments, pri, impact investing, social entrepreneurship, business forms, corporate forms, regulation, taxation, securities

JEL Classification: K20, K23, K29, L20, L21, L22, L29, L30, L31, L33