What Legal Forms Can A Social Enterprise Take?
A social enterprise is a new form of business structure that is becoming increasingly popular in the United States. These organizations are formed as companies that serve the community for the greater good. By law, these companies can form as a non-profit corporation or as a for-profit entity that makes specific contributions to the greater social good. When establishing a social enterprise it is imperative that the objectives are set forth in the legal forms of the company and that the guidelines are strictly adhered to during the course of business. The decision on what type of legal forms the corporation will take, profit or non-profit, decide the tax status. Currently, there is no separate tax distinction for a social enterprise.
What Qualifies A Company To Be Designated As A Social Enterprise
While the term “social enterprise” is not well defined in the marketplace, a common definition for this structure is:”An organization who operates as a business entity that addresses social issues.The legal forms of this company may be non or for profit”. An example of this type of business would be a foundation that provides seed money to businesses forming in economically stricken areas. This business, if set in a for-profit structure, would produce a good or service to generate income. From this income a large percentage would be used to provide funding for their specific social issue. These companies are very similar to non-profit organizations.
Can Anyone Form A Social Enterprise
Any business, currently in operation or brand new, can convert to a social enterprise. A company that decides to rely only on recycled material, environmentally friendly products or items made only from natural components, despite profit ramifications, can be considered a social enterprise. A business whose sole purpose is to generate revenue to help the homeless is also a social enterprise. The defining measure is if the business gears its objectives to help the greater good.
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Thanks for the review.
Oh also, loving the blog design. I had a similar designed blog to yours before I sold it at the end of last year.