Social Enterprises

Enterprise law is a body of law that have been around for more than a hundred years, but it is still growing as we speak. It is the body of law that governs commercial activity in many fields including the distribution of patents and the registration of trademarks. It also encompasses corporate law, the laws that govern mergers and acquisitions, and finally, business law that applies to partnerships, corporate acquisitions, and mergers and restructurings. It is a broad area of law that is the subject of numerous books and articles.

The most important feature of enterprise law is its focus on property rights. It seeks to protect the interests of the individual shareholder as much as it does the interest of the corporate company. The concern of the law is to prevent unjust enrichment or abuse of the power of ownership. There are two aspects of this concern. The first relates to the economic power inherent in property; the second relates to the social value of property.

Most people would agree that the concern of business registration should be directed towards the interests of shareholders. However, this is not always how the law has tended to deal with these issues. For example, some of the founding members of the corporation were not shareholders in the beginning, yet all of the initial investors were shareholders in the corporation. The reason for this was that the business registration was concerned with procedures that would allow the initial shareholders to control the company, not the other way around.

Zenerichi Shishido is often cited as the father of modern enterprise law. It is also credited as having laid the cornerstone for the theories that would become the cornerstones of today's enterprise law. In essence, Shishido's argument is that shareholder's wealth is the wealth of the company and that by encouraging shareholder's investment, the company will prosper and thus the wealth of the shareholders. His thinking became the starting point for all enterprise law cases that followed.

These enterprises were distinguished by three characteristics: they were large, they had substantial capital and they were characterized by social enterprise. Large means large legal structures, substantial capital means large numbers of shareholders and social enterprise suggests social aspects. These three characteristics are actually not unique to modern day ventures. Ancient Roman law, for example, recognized land ownership by natural persons and limited ownership by men of powers. A small number of states in medieval Europe permitted large landed estates and created elaborate legal structures designed to protect the assets of the wealthy.

In modern times, many states have a limited liability company or limited liability entity, which is tantamount to a corporation and create tax advantages. The advent of social enterprises in the 20th century changed this and the term "enterprise law" became applied to all laws governing enterprises, including those that allowed for joint ventures and those that rewarded joint ventures with public subsidies. Consequently, all laws relating to corporations came under the heading of enterprise law. Today, almost every business enterprise involves some form of venture.

Most business enterprises are also considered to be social enterprises, since most employ staff and engage in productive activities directed towards ensuring the success of the enterprise. Consequently, the operation of many businesses today conforms to the principles of social enterprise law. They are directed toward ensuring the welfare of employees, providing quality public goods and services and ensuring environmental sustainability. Some organizations operate on behalf of the communities in which they operate and their business structures involve significant relationships with local stakeholders. Such institutions may adopt a dual model of the corporation and a board of directors. Under current law, however, a company can only engage in conduct that serves the purposes of its shareholders.

Charitable solicitation is one of the more common ways that businesses interact with government entities for the purpose of attaining tax-exempt status. The main difference between charitable solicitation and joint venture transactions is that the latter involves a transfer of funds from one firm to another. Under current law, any transfer or distribution of assets is not subject to taxation unless the value of the assets passes certain threshold values. Charitable solicitation involves transfers of cash or assets that are held by the participants in the transaction for the purpose of using them to engage in charitable solicitation activities. A major benefit of Charitable solicitation transactions under current law is the ability of charities to solicit donations from individuals who do not ordinarily engage in such charitable solicitation.