Social enterprises: does the legal form matter?

Abstract

Purpose. The purpose of this paper is to try to answer the question what are the main legal approaches to facilitate the creation of social enterprises? What kind of advantages or disadvantages have these models? Design/methodology/approach. Research focuses on the analytical review of the legal acts and previous insights of researchers. Theoretically this paper employs the philosophical doctrine of the realism. In the social world objects have varying probabilities of coming into existence and causing new objects, which connect into identifiable structures. We investigate the social world in its context, which counts as evidence, concepts, measures, etc. (Letherby et all, 2013). This research also uses the qualitative research methods, such as textual analysis (Lockyer, 2008), comparative method (Vogt, 2005), and generalization (Willams, 2004). Findings. The main scenarios in creating the legal framework for social enterprises are whether the adaptation of existing legal forms or creation of new legal forms taking into account the specific features of social enterprises. Some law makers react in different way by creating the so called social enterprise legal status, or legal qualification. However, the ultimate European legal form of social enterprise is particularly difficult to develop considering very different traditions of the development of social entrepreneurship in different countries. Research limitations/implications. This is a general review of the EU legislation regulating this area, and of social entrepreneurship legal regulation in the selected EU Member States and the USA, which possibly could stimulate the further research and discussion. Practical implications. This research will contribute to the deeper analysis of the legislation in this area and more defined legal categories and positioning of social entrepreneurship in the legal systems of the EU Member States. The results of the research can be useful improving the national legal framework on social entrepreneurship, which is clearly insufficient in nowadays stage of rapid popularization of social entrepreneurship in Lithuania. Originality/Value. This research looks for the legal preconditions of social entrepreneurship in the EU legislation and uses the comparative method to identify and examine the most common legal framework for social enterprises in the EU Member States.