Saturday, January 24, 2015
Kate Cooney (School of Management, Yale), Justin Koushyar (Business School, Emory), Matthew Lee (INSEAD (Singapore)), and Haskell Murray (Belmont) have posted the results of their research titled Benefit Corporation and L3C Adoption: A Survey at the Stanford Social Innovcation Review blog. Here is the introduction:
A major challenge for social enterprises pursuing both a social mission and financial profit has been the absence of clear legal guidance about their responsibilities to investors and other stakeholders. In the United States, a number of new legal forms specific to social enterprise have emerged over the last decade to fill this gap. The two most common, the low-profit limited liability company (L3C) and the benefit corporation, modify traditional business legal structures to clearly enable and mandate the pursuit of social and environmental as a for-profit business enterprise. This is no small matter—the last major legal form to be created in the United States was the LLP in 1991.
The success of a new regulatory infrastructure for social enterprise depends heavily on the extent to which state legislators, then companies, adopt these forms. To date, a lack of good data has made it difficult to evaluate progress. To address this, we worked over the last year with Secretary of State offices and Intersector Partners to develop systematic, nation-wide data on adoption of these forms.