Early Lessons in Social Enterprise Law

Abstract

The growing body of law that is developing alongside the international proliferation of social enterprises has had its share of successes and failures. Experiences from the American low-profit limited liability company, the British and Canadian community interest company, and attempted cross-border implantation of the American benefit corporation in Canada offer valuable lessons for legislators contemplating new social enterprise laws to address the needs of their constituents. This chapter considers these early lessons and provides a framework for the strategic implementation of social enterprise laws when warranted within a nation’s corporate landscape. While one may assume that the implementation of social enterprise laws can only help to advance social progress, this would be an incomplete – and, at times, incorrect – answer. With proper strategic implementation, hybrid alternatives could become the new legal tool that ignites the growth of social innovation from the private sector. But social enterprise laws could also thwart mainstream reform efforts. They could circumvent resources traditionally used toward the non-profit sector, and they may simply promote a neoliberal agenda and the shrinking of government responsibility. Without strategic implementation and brand awareness, the odds are likely that hybrid corporate legislation will be left unused – a lost opportunity. Policymakers should take these concerns into account throughout the process of introducing new social enterprise laws within a jurisdiction.