Social Enterprise Simon J. Micallef – APS Consult Ltd. Dr. Anthony Galea – DF Advocates
Contents • Introduction • Defining Social Enterprises & the Social Economy • The European Scene • Aim of Social Enterprise Policy • Policy Options • Policy Process • Conclusion
Defining Social Enterprises & the Social Economy
Nature of Social Enterprises • Social Enterprises are: – Commercial Entities • Operate on the market • With Not-For-Profit Objective • Majority of revenue from services offered – Social Objective • Services of a Social Nature • Services to or by Vulnerable Social Groups – Gender Mainstreaming – Equality – Democratic Principle • Participation • No single shareholder can have a controlling interest
Definition: European Parliament (A6-0015/2009) – primacy of the individual and the social objectives over capital; – defence and implementation of the principles of solidarity and responsibility; – coincidence of the interests of user members and the general interest; – democratic control by members; – voluntary and open membership; – self-management and independence of public authorities; – mobilisation of the bulk of surpluses in pursuit of the aims of sustainable development, the interests of services to members and the general interest.
Types of Organisations – Maltese Law •Civil Partnerships •Foundations & Trusts •Associations, including Voluntary Organisations •Cooperatives To qualify as Social Enterprises, these organisations need to have a statute that enshrines the three main principles of: • Commercial nature; • Social objective; • Democratic principle.
Sectors • Animal rights and welfare • Persons with special needs • Awareness and advocacy • Education • Charity and social • Elderly business/enterprise support • Employee rights and • Children Rights advocacy welfare • Environment protection • Ethical finance and and sustainability investment • Land and marine • Healthy living conservation • Mental health • Community development • Equality • Sport
Sector In Malta • Vibrant Voluntary Sector with wide reach – 86.25% micro organizations, – 8.75% small organizations – 5% medium-sized organizations • Governance – 94.39% have a statute – Proper Administration setup • Human Resources – Employs 2.85% of the Maltese Labour Supply – High Female Participation – also at managerial level
The European Scene
Country Case Studies - Belgium • The Belgian Legislation recognises the Registrar of Companies as the single regulatory framework for social enterprise. • Organizations that are seen to engage in the social economy are: – ‘Accredited Cooperatives’ having elements in their statute that qualify them as ‘Social Purpose Companies’; and – all other kinds of Companies which in their M&A incorporate characteristics that qualify them as ‘Social Purpose Companies’. • Associations and Foundations, by law are not to undertake any trading activity.
Country Case Studies - UK • In UK, Social Enterprises are registered under different legal structures. The majority are registered as: – Companies Limited by Guarantee (CLG), – Industrial and Provident Societies (I&PS); – Community Interest Company (CIC). • Tax Relief is available to individuals and corporate bodies investing in accredited Community Development Finance institutions (CDFI’s). • In UK a co-operative is not a recognized legal structure. By definition, a co-operative is a group or organization that voluntarily subscribes to a set of values, principles and behaviours. It can take on any legal structure.
European Commission • Communication from the Commission: “Towards a Single Market Act – for a highly competitive social market economy” • “Proposal No 36: In 2011 the Commission will propose a Social Business Initiative in order to support and accompany the development of socially innovative corporate projects within the single market by means of in particular social ratings, ethical and environmental labelling, revised rules on public procurement, and by introducing a new investment fund regime and tapping into dormant savings.
Policy Options
Aim of Social Enterprise Policy • Define Legal Personality • Assure ‘Bankability’ and ultimately ‘Sustainability’ • Create a market for Social Equity: – Define Social Equity – Promote Social Venture Capital – Develop Social Corporate Venturing • Custodianship of: – Not-for-Profit principle, Social Motive & Democratic Control. • These principles qualify Social Enterprises for funding.
Policy Option – Social Enterprise Label Legal Form Social Enterprise Form Create a Social Co-operatives Enterprise Label. Associations, including VOs Entities recognised Foundations & Trusts as ‘social economy’ compliant
Social Enterprise Label • Clear Definition of Social Motive • ‘Not-for-Profit’ & Shareholder/Stakeholder participation (Capital Requirement) • Control and Membership • Operational Benchmarks – Management – Human Resources – Services Derived Income • Liquidation • Reporting mechanisms
Policy Option – Social Purpose Company Legal Form Social Enterprise Form New legal form for Entities registered entities such as: under this new legal form are recognised Social Purpose as social enterprises. Company
Policy Process
Conclusion
Recommend
More recommend
