Document Type

Working Paper

Publication Date

2017

Abstract

In this brief essay, we explore the relationship between law and social enterprise. Is social enterprise, like the “corporation,” a legal construct, or is it a term used to capture an emerging set of practices by existing entities—for example, where registered charities set up a separate structure to generate revenues which then fund the charitable activities. An organization that has undertaken such practices is the well-known Canadian charity, “Me to We,” which, while focused on development activities in sub-Saharan Africa, also has a revenue generating operation selling fair trade T-shirts and other goods. In describing this relationship, Me to We’s website declared:

ME to WE social enterprise combines best business practices with increasing social awareness. Our commitment to help improve cultural, community, economic and environmental outcomes is at the centre of our business. Every ME to WE product sold makes a direct, measurable impact in a WE Charity community overseas, empowering them to build a better future.

Other approaches to social enterprise suggest a new legal hybrid is emerging which combines elements of for-profit business with elements of NGO social purposes. Whether a new legal structure emerges, or existing structures are adapted, a host of important legal questions follow. As designation as a social enterprise may have tax and regulatory implications, how is social enterprise to be defined? Where public benefits are created for social enterprise, such as Ontario’s “Social Enterprise Strategy” and “Social Enterprise Demonstration Fund” which boasts a population of 10,000 Social Enterprises in the province, who counts as a social enterprise and why? Is this jurisdictional boundary a function of statutory interpretation, policy, or the operational discretion of a public agency of funding body?

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