BY LESLIE COULTER – Social enterprise laws are an attractive option for the Florida Legislature because the regulations foster economic development among residents, and support and incentivize ventures that are not only focused on their bottom line but also maintain as part of their mission a commitment to contribute positively to society. These laws are premised in the idea that a business should be able to pursue a social good without having to squarely fit within the realms of a for-profit or a non-profit organization. Through these provisions within some states’ law, socially minded entrepreneurs are afforded greater latitude and opportunity to achieve financial, social, and environmental results, while generating sustainable, viable business ventures.[1] Although states have a varying degree on their interpretation of the complexities of the law, entrepreneurs in these states are in an arguably better position to compete within the established market.
Because these organizations and individuals are tackling the unmet needs of the community within the current marketplace, i.e., training and skills-building for re-employment services, workforce development, waste management services, access to water, promotion of small business initiatives, and the like, they should have financing and structuring options outside the traditional model to make it easier to achieve these goals.[2] For example, under these laws, a charity could form a for-profit subsidiary that operates consistent with its charitable purposes, or a for-profit corporation could establish a private foundation as an affiliated corporate foundation. [3] While it is permissible under the conventional limited liability corporation model to dually pursue for-profit and non-profit agendas, organizational forms such as the flexible purpose corporation, low-profit limited liability companies (L3C), and benefit corporations present more desirable options for these savvy entrepreneurs.[4]
By offering these structuring options to entrepreneurs pursuing a social good through their business activity, the Florida legislature could send a consistent message that it supports small businesses within the state and encourages economic growth and development. Recognition of these types of provisions within the traditional framework is historically in line with Florida’s pro-business and jobs agenda.
[1] Thomas Kelley, Law and Choice of Entity on the Social Enterprise Front, 84 Tul. L. Rev. 337 (2009).
[2] Filipe M. Santos, A Positive Theory of Social Entrepreneurship, 111 J. Bus. Ethics 3, (Dec. 2012).
[3] Which Legal Structure is Right For My Social Enterprise? Stanford Graduate School of Business, at 59, (Dec. 31, 2012), http://csi.gsb.stanford.edu/sites/csi.gsb.stanford.edu/files/GuideToSocEnterprise_US.pdf
[4] See id. (a few of the states that have recognized some concept of a social enterprise law: Delaware, California, Vermont, New York, Illinois).
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Leslie Coulter is a 2016 Staff Editor of the Race and Social Justice Law Review.
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This is a wonderful article. I concur with it’s origin being foundational . It is what America was established on. The mind set that anyone can be an entrepreneur . Fulfilling a hearts dream .., this belief in itself needs to be rebirthed!