The social enterprise: a contribution to its definition from the perspective of Commercial Law

Abstract

For some years now, general interest and profit have converged in social enterprises. Their operating mechanism is, in principle, simple: the pursuit of social or general interest objectives without neglecting profit (at least, objective profit). However, the diversity of entities that can operate as social enterprises and doubts about their concept, among other things, make this a difficult phenomenon to define. This paper studies the phenomenon of social enterprises in order to locate them within our legal system. Two essential elements are proposed in relation to the objectives they pursue: (i.) the prioritization of a social purpose; and (ii.) the pursuit of objective (and, in some cases, subjective) profit. Moreover, this paper uses the spectrum school model to locate social enterprises. This school asserts that all entities can be placed on a spectrum with two ends. At one end are traditional non-profit entities, and at the other are traditional for-profit companies. Between these two ends are hybrid entities, including social enterprises at the center of the spectrum. Finally, some open questions are raised about the corporate governance issues that may arise when a for-profit company or, in particular, a traditional non-profit organization becomes a social enterprise, through the case of «OpenIA» and its conversion to a model that adopts a purpose formulation similar to that of social enterprises.