THE LEGAL REGULATION OF SOCIAL ENTREPRENEURSHIPS: EUROPEAN EXPERIENCE

Abstract

The paper analyzes the legal regulation of social enterprises in European countries. The importance of the research is caused by the necessity to intensify the development of social entrepreneurship in Ukraine. Under the conditions of undergoing administrative and territorial reform, newly established territorial communities need not only real stable sources of local budgets, but also the mechanisms of practical implementation of local initiatives. Social enterpreneuship can satisfy both of these needs. The formation and improvement of legal framework for social enterprises is essential to speed up its development in Ukraine. In Ukraine there is no adopted law on social enterprenewship that would provide clearly defined criteria of social enterprises, legal mechanisms of their support and regulation of their activities. Companies that position themselves as social, can not adopt the “social enterprise” label. They use legal forms of entities, defined by the current Ukrainian legislation which do not reflect the special status of social enterprise and do not provide a clear and favorable taxation. It was found out, that almost in all European countries social enterprises are supported by the state what is manifested in the creation of legal framework for such companies. In a number of European countries, new legal forms, reflecting the entrepreneurial approach adopted by the “not-for-profit” organizations, have been introduced. In particular, in Italy – “social co-operatives”, in Britain – “community interest company”, in Portuguese – “social solidarity co-operative”, in Greece – “limited liability social co-operative”, in Belgium – “social purpose company”. The most common type of new legal forms is co-operative, but in Italy and Great Britain they belong to the third sector, in other countries – to the business sector. Along with the new forms, the traditional business legal forms are used, the most popular of which is the “association”. This situation is typical for the countries where the new forms do not provide significant advantages over traditional or establish additional requirements. Social enterprises are active in a wide spectrum of activities, but the major type of social enterprise across Europe is “work integration social enterprise”. In recent years social enterprises experienced a significant development in a wide range of other areas, such as health care, training, environment protection, cultural services, sports and others.