Social Enterprise Introduction
U.S. legal entities traditionally have been formed either as for-profit organizations or as nonprofit organizations. For-profit organizations are designed to pursue profits and shareholder wealth, while most nonprofit organizations are designed strictly for charitable pursuits and public benefit. Since 2008, however, twenty-five states and the District of Columbia have enacted statutes authorizing hybrid legal entities—generally, special forms of corporations and limited liability companies[1] —that are designed to pursue both a for-profit business purpose and a beneficial humanitarian and/or environmental purpose. These special hybrid legal entities have been authorized largely in response to the growth of for-profit “social enterprises:”[2] organizations devoted to pursuing shareholder wealth and serving a broader humanitarian and/or environmental need.[3]