social entrepreneurship topic 5
TRANSCRIPT
Dr Anis Amira Ab Rahman 2015
SOCIAL ENTREPRENEURSHIPACS 3063
SOCIAL ENTREPRENEURSHIP ROLES:
The creation of social entrepreneurship’s venture
Dr Anis Amira Ab Rahman 2015
SOCIAL ADMINISTRATIO
N
SOCIAL ENTERPRISES
PUBLIC ENTERPRISES
PRIVATE INDUSTRIES
Social Purpose
Primary Objectives Of The Enterprise
Commercial Purpose
Public
Ownership
Private
Dr Anis Amira Ab Rahman 2015
TYPES OF SOCIAL VENTURE
SOLE PROPRIETOR
COOPERATIVE
PARTNERSHIP
PRIVATE LIMITED
PUBLIC LIMITED TRUST
Dr Anis Amira Ab Rahman 2015
For-profit Corporation
Partnership
Sole Proprietorship
Non-profit Corporation
Charity
Co-operation Corporation
Dr Anis Amira Ab Rahman 2015
pay corporate tax
cannot access grants
cultural/ psychological barriers with operating a “for-profit social business
For-profit Corporation
incorporated under the Business Corporations Act (Ontario) ( the “OBCA”) or the Canada Business Corporations Act (federal) (the “CBCA”)
with share capital
most flex in terms of profit- making activities
can access all forms of investment (debt, equity, etc)
provides clarity of purpose (i.e. the financial bottom line)
limited personal liability
Χ
Dr Anis Amira Ab Rahman 2015
Charity incorporated via Letters Patent under the Corporation Act (Ontario) or Canada Corporations Act (federal)
without share capital
don’t pay corporate tax on earnings
can issue tax receipts
can access many government/ foundations/ corporate grants
least flex in terms of profit –making activities
limited in the types of investment you can access (e.g. equity)
psychological barriers with operating a “social business”
an aversion to “risk taking”
can lose status if “too successful”
Χ
Dr Anis Amira Ab Rahman 2015
Sole Proprietorship registered via Business Name Act (Ontario) or Canada Corporations Act (federal)
without share capital
the simplest (and quickest)legal form
you have full control of business decisions
flexibility to make business decision quickly
no separate filing for income tax
unlimited liability!!
the business is the entrepreneur
hard to find investors
limited creative input (i.e. you’re the only one with ideas!)
less “professional” than other forms
Χ
Dr Anis Amira Ab Rahman 2015
Non-profit Corporation
incorporated via Letters Patent under the Corporation Act (Ontario) or Canada Corporations Act (federal)
generally without share capital
can access grants
can access debt financing
tax exempt as long as organized and operated for defined social/ community benefit
some NPs are more open to (limited) risk-taking
can’t access issue tax receipts
limited in the types of investment you can access (e.g. equity)
psychological barriers with operating a “social business”
can lose status if “too successful”
Χ
Dr Anis Amira Ab Rahman 2015
Partnership registered under the Partnership Act (Ontario) with or without share capital usually organized using a Partnership Agreement
similar benefits to sole proprietorship
combines skills/ competencies of two people
can sign contracts and borrow money in its own right
for most partnership, unlimited liability! (at least in Canada..)
acrimony between partners is common
difficult to find investors
Χ
Dr Anis Amira Ab Rahman 2015
Co-operative Corporation incorporated under the Co-operative Corporation Act (Ontario) or Canada Cooperatives Act (federal)
wither with or without share capital
well- established structures
integrated the concept of “community benefits” already
cannot issues tax receipts
generally not exempt from paying tax
psychological barriers with operating a “social business”
difficulty making decisions (too many people at the table)
Χ
Dr Anis Amira Ab Rahman 2015
A model of social entrepreneurial intention formation ( Mair and Noboa, 2006)
Emotional:Empathy
Cognitive: Moral judgement/Empathy
Perceived Desirability
Self-DirectedSelf-Efficacy
Others-Directed Social Support
Perceived Feasibility
Behavioural Intentions
Social Entrepreneurial
Behaviour
Social Enterprise
Cognitive Emotional
Enablers
Dr Anis Amira Ab Rahman 2015
Definition of Business Model
A business model describes the
rationale of how an organization creates, delivers and captures
value
Dr Anis Amira Ab Rahman 2015
Social Enterprise Model
Non-Profit Continuum
Gifts Grant
s
Free for
services
Subsidized
Supported in part
with other funds
Self- sustainin
g
Supports itself from sales
income
Profitable
Income exceeds expenses
----Traditional Models---
------Social Enterprise Models-------
Dr Anis Amira Ab Rahman 2015
Legal Innovation : CIC (UK)
established to trade (goods or services) for the community good
requires “community interest statement” application to the CIC Regulator. Publically-available annual reports required to confirm (adherence to) community interest requirement
may issues shares in order to raise capital
cap on returns (dividends paid) set by the Regulator
subject to an “asset lock”~ assets and profits must be permanently retained
by the CICs for community benefit, or transferred to another CIC subject to an asset lock, or to a charity
taxed in the same manner as other businesses
Dr Anis Amira Ab Rahman 2015
Legal Innovation : L3C (US)
variation on American Limited Liability Companies (LLCs)
LLC investors are members rather than shareholders
terms of the operating agreement guarantee the public benefit nature of the entity’s work
like LLCs, L3Cs are not subject to federal income tax themselves, but the income they pay to members is taxable according to the rates applicable to each member
able to attract private capital through the sale of shares and other securities, various forms of loans, or other commercial financial arrangements
ability to receive Program Related Investment from foundations
no assets lock and no dividend cap
Dr Anis Amira Ab Rahman 2015
Legal Innovation : B Corp (US)
to be certified as a B corporation under the B Lab system, the corporation must:
~ achieve a minimum score of 80 (out of 200) on the B Rating System, a tool to access a company’s social and environmental performance.
~ agree to make legal changes to its articles of incorporation to expand the responsibilities of the company to include consideration of stakeholder interests.
~ pay B Lab an annual licensing fee.
~ recertification is required every two years.
Dr Anis Amira Ab Rahman 2015
Business development for social enterprise
Motivation
Preparation
Assessment
Test your idea
Exploration
Business planning
Start up1
2
3
4
5
6
7
Dr Anis Amira Ab Rahman 2015
Social Enterprise’s Development Path
Process Steps
Framework to support
Process
Overall Portfolio Strategy
Review processes
Investment objectives
Seed pitch Seed
Evaluation
Business plan Business plan
Evaluation
Product development plan and status
Project plan and status review
Speed Opportunity
Review
Business Plan review
Project status review
1 2 3 4
Dr Anis Amira Ab Rahman 2015
Social enterprise’s business plan
Executive summary
The social enterprise
The organisation
The market
The social impact
Business development
People
Operations
Finance
Appendices
Dr Anis Amira Ab Rahman 2015
REFERENCEShttp://
www.barnhartlawplc.com/1660/social-enterprise-public-benefit-corporation-movement-gaining-momentum
http://www.slideshare.net/socialentrepreneurship/07-entr-aps-1015-h-class-7-business-model-considerations-for-social-enterprise?qid=ad96cbb9-33e3-4b75-a965-6f23d22dbbdc&v=qf1&b=&from_search=4
http://www.slideshare.net/Alex.Osterwalder/business-models-beyond-profit-social-entrepreneurship-lecture-wise-etienne-eichenberger-iqbal-quadir-grameen-bank-grameen-phone
http://impact.sosense.org/en/blog/finance-paradoxonhttp://tricofoundation.ca/wordpress/2012/03/learning-about-
social-enterprise/http://www.slideshare.net/socialentrepreneurship/entr4800-class-
5-part-2-financing-considerations-for-social-enterprises-9720754?qid=ad96cbb9-33e3-4b75-a965-6f23d22dbbdc&v=qf1&b=&from_search=3