About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

46 Wake Forest L. Rev. 591 (2011)
Benefit Corporations - A Sustainable Form of Organization

handle is hein.journals/wflr46 and id is 597 raw text is: BENEFIT CORPORATIONS-A SUSTAINABLE FORM OF ORGANIZATION? Dana Brakman Reiser* INTRODUCTION Founders of social enterprises believe profits and social good can be produced in tandem and wish to form organizations that will pursue these dual missions.' They will, however, encounter obstacles to articulating and enforcing such dual missions if they adopt either a traditional nonprofit or for-profit form of organization. Nonprofit forms bar profit distribution2 and for-profit forms will create practical, if not legal, pressure to favor profit maximization over social good when the two come into conflict.3 And these two imperatives will certainly, at times, conflict. If more profit could always be obtained by pursuing social good, traditional for-profits would produce the optimal level of social goods, charities would be swimming in resources, or both. Social entrepreneurs believe social good can be produced along with profits and desire hybrid forms of organization to smooth a single enterprise's path to realizing both goals.4 A mounting number of jurisdictions have attempted to meet this demand by enabling new hybrid organizational forms. These include the low-profit limited liability company (L3C) available in nine U.S. states5 and the community interest company (CIC) * Professor of Law, Brooklyn Law School. I greatly appreciate the support of Brooklyn Law School's summer research stipend program, the research assistance of Priti Trivedi, and the comments and suggestions of Claire Kelly, Melanie Leslie, Antony Page, and the panelists and participants at the Wake Forest Law School's Symposium, The Sustainable Corporation and the L3C A to Z Conference. Any remaining errors are, of course, my own. 1. See Robert Katz & Antony Page, The Role of Social Enterprise, 35 VT. L. REV. 59, 86-93 (2010); Thomas Kelley, Law and Choice of Entity on the Social Enterprise Frontier, 84 TUL. L. REV. 337, 338-342 (2009). 2. See Henry B. Hansmann, The Role of Nonprofit Enterprise, 89 YALE L.J. 835, 838 (1980). 3. See Einer Elhauge, Sacrificing Corporate Profits in the Public Interest, 80 N.Y.U. L. REV. 733, 736-38 (2005) (arguing the view that corporate managers must only pursue profit maximization is widely held, though not strongly supported). 4. See Kelley, supra note 1, at 339. 5. See 2011 R.I. Pub. Laws 67 (authorizing L3Cs in Rhode Island); 591

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most