Let's Not Give Up on Traditional For-Profit Corporations for Sustainable Social Enterprise

27 Pages Posted: 14 May 2018 Last revised: 26 Jul 2018

Date Written: June 2018

Abstract

The past ten years have witnessed the birth of (among other legal business forms) the low-profit limited liability company (commonly known as the L3C), the social purpose corporation, and the benefit corporation. The benefit corporation has become a legal form of entity in over 30 states. The significant number of state legislative adoptions of new social enterprise forms of entity indicates that policy makers believe these alternative forms of entity serve a purpose (whether legal or extra legal).

The rise of specialty forms of entity for social enterprise, however, calls into question, for many, the continuing role of the traditional for-profit corporation (for the sake of brevity and convenience, denominated “TFPC” in this essay) in social enterprises, including green economy ventures. This essay argues that TFPCs continue to be a viable—and in many cases desirable or advisable choice of entity for sustainable social enterprise firms. The arguments presented are founded in legal doctrine, theory, and policy and include both legal and practical elements.

Keywords: social enterprise, social entrepreneurship, benefit corporation, L3C, social purpose corporation, for-profit corporation

JEL Classification: K22, M13, M14,

Suggested Citation

Heminway, Joan MacLeod, Let's Not Give Up on Traditional For-Profit Corporations for Sustainable Social Enterprise (June 2018). 86 UMKC L. Rev. 779 (2018); University of Tennessee Legal Studies Research Paper No. 353. Available at SSRN: https://ssrn.com/abstract=3171193

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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