Open Access Article

Title: Strategic, Legal, and Accounting Challenges for Social Enterprises

Authors: Robert Moussetis; Thomas Cavenagh

Addresses: Author address listing can be found in the "About the Authors" section at the end of the article.

Abstract: Purpose - This study is to trigger an integration of strategic, legal, and accounting issues relating to the formation and operation of social enterprises (SEs). It provides a conceptual model to facilitate debate, research, and practical approaches to aspiring social entrepreneurs. Design/Methodology/Approach - The study utilizes a secondary research method. It reviews literature from classical business and entrepreneurship to law and accounting journals and overcomes the complexity of topics to create a holistic approach to social entrepreneurs' challenges and opportunities. Findings - It provides a vantage point of the distinctive nature of social entrepreneurs and entrepreneurial motivations. It explores the advantages of legal and accounting challenges in forming a Low-Profit Limited Liability Company (L3C). In particular, it delineates the intricacies between an L3C, a limited liability company (LLC), and not-for-profits. Finally, it offers a conceptual model for further research and a set of practical implications. Research limitations/implications - This study invites further investigation of the strategic formation of SEs. Specifically, exploring the external environment in conjunction with strategic behavior, capabilities, law, and accounting challenges. In addition, it provides a conceptual model for further investigation of the significant dynamics of SEs. Practical implications - The creation of the conceptual model provides a guiding start for research, debate, and practical guidelines for aspiring entrepreneurs by integrating strategic, legal, and accounting challenges and opportunities. Social implications - The proliferation of SEs provides solutions to social challenges while entrepreneurs generate profit. It provides a dimension to a socially conscious person to engage in enterprises. Finally, it may provide a new paradigm for new capitalism that deliberately combines social and financial benefits. Originality/Value - This study develops a conceptual model to explain the complexity and dynamics of social entrepreneurship and provide exposure to SEs' legal and accounting challenges and opportunities.

Keywords: Social entrepreneurship; strategy; L3C; law; accounting.

DOI: 10.1504/JBM.2021.141286

Journal of Business and Management, 2021 Vol.27 No.1, pp.23 - 52

Published online: 05 Sep 2024 *