Section x:Social Enterprises in Europe
May 23, 2017
What are the main legal systems in Europe?
Main Commercial Companies in Europe
Continental Europe (civil law): Ø “Anonymous” Companies
• Board of Directors + Shareholders (one-tier system) • OR • Management Board + Supervisory Committee + Shareholders (two-tier
system) • Highly regulated (for large companies)
Ø Private Companies • Governance depends on the country of origin
United Kingdom (common law): Ø CompanyLimitedbyGuarantee
• Trustees for Charities or Directors + MembersØ CompanyLimitedbyShares
• Board of Directors + ShareholdersØ PublicLimitedCompany
Main Legal Forms for Impact Investing in France • SociétéparAc,onsSimplifiée(privatecompany):
§ Nominimumcapital§ Execu0ve(Président)+Shareholders(onlyrequirement)§ Veryflexible
• SociétéàResponsabilitéLimitée(privatecompany):
§ Nominimumcapital§ Gérant(manager)and/orco-managers+members§ Notveryflexible
• SociétéAnonyme(rare):
§ 37.000eurosminimumcapital§ BoardofDirectors+Shareholdersor§ ManagementBoard+SupervisoryCommiMee+Shareholders§ Notveryflexible
What is a Social Enterprise in Europe?
Definition of Social Enterprise in Europe : 5 characteristics
MappingStudyESELA,SocialEnterpriseinEurope.Developinglegalsystemwichsupportsocialenterprisegrowth(2015).
Legal Form vs. Legal Status
Main Legal Forms for Social Enterprises in Europe
ESELA,SocialEnterpriseinEurope.Developinglegalsystemwichsupportsocialenterprisegrowth.
Legal Forms for Social Enterprises in Europe
Legal Statuses for Social Enterprises in Europe
Comparison Chart – Examples of Social Enterprise Legal Statuses
Maincriteria EuropeanSE ESS-ESUSEnterprise
(Fr)
SIS(Lux)
SocietaBenefit(It)
CIC(Uk)
EconomicAc0vity
✔ ✔ ✔ ✔ ✔
PrimarySocialAim
✔ ✔ ✔ ✔ ✔
AssetandProfit
Limita0on
✔ ✔ ✔ ✔
Inclusivegovernance
✔ ✔
Organiza0onalAutonomy
✔ ✔ ✔ ✔
Compensa0onLimit
✔ ✔ (reasonable)
ImpactRepor0ngandMeasurement
✔ ✔ ✔
Examples of Social Enterprises in Europe
ESUS Company in France “Entreprise de l’économie sociale et solidiare”
ESUS Company in France
Entreprise Solidaire d’Utilité Sociale (ESUS) Lawn.2014-856of31July2014
Keyfeatures
SSECompanies
• “Trad i0ona l” SSE Companies :assoc iaIons, foundaIons, mutualcompanies,cooperaIves);&
• Commercial companies with thefollowingstatutoryprovisions:• Primarysocialaim(socialu0lity),• Democratic governance, and • Limits on distribution of profits
SocialUJlityandSolidarityEnterprise
• Primarysocialaim(socialu0lity),• Limita0ononcompensa0on,• Ac0vity has a significant impact onfinancialreturnsorexpenses,
• Sharescannotbetradedonregulatedmarket,
• Renewableevery2or5years
ESUS Company in France
Entreprise Solidaire d’Utilité Sociale (ESUS) Lawn.2014-856of31July2014
Mainadvantages
SSECompanies
• Image/Communica0on• Visibility/Funding• Subsidizedemploymentcontracts(insomeregions)
SocialUJlityandSolidarityEnterprise
• 90/10SolidaritySavingsFunds• Taxadvantagesoninvestment(taxreducIononinvestment)
• Subsidizedemploymentcontracts(insomecases)
• Civilservicevolunteers
ESUS Company in France
Democratic governance requirement The ESS company needs to have a democratic governance, defined and organized by its statutes, allowing information and participation, of shareholders, employees, and stakeholders, regardless of capital or financial contribution.
AdvisoryBoardorDecision-making
body
shareholders employees stakeholders
SIS Company in Luxembourg
SIS Company in Luxembourg
Société d’Impact Sociétal (SIS) Lawn.255of12December2016
Key features
CommercialCompanies
• CommercialandCoopera0veCompanies(SA,SARL,SConly)
SISCompany
• Primarysocialaim(socialu0lity),• Autonomousmanagement,• Limita0ononprofitandassetdistribu0on,
• Annualimpactreport+KPIstomeasureperformanceofsocialimpact,
• Limita0ononcompensa0onforemployeesonly(6xmin.wage)
• Annualaudit
SIS Company in Luxembourg
Société d’Impact Sociétal (SIS) Lawn.255of12December2016
Main advantages
CommercialCompanies
SISCompany
SIScompanieswith100%ofimpactshares:• Collec0vityincometaxexemp0on,• Commercialcommunetaxexemp0on,• Fortunetaxexemp0on,• Incometaxdeduc0onfordona0ons(cash)grantedtoSIS(sameasFRUPandASBL),
• Publicfunding
AnySIScompany:-Visibility,-Grants,-Publictenders(marchépublique)
Independent management requirement
• SIScompanyrequiresindependentmanagementwherebythe
membersofthecompanyarefullycapabletochooseandrevoketheirowngoverningbodiesandcontrolandorganizeacIviIes
SIS Governance Requirement
Pleasevisitwww.esela.euandcontactusatinfo@esela.edutojoinournetwork!