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SOCIAL ENTREPRENEURSHIP ACS 3063 SOCIAL ENTREPRENEURSHIP ROLES: The creation of social entrepreneurship’s venture Dr Anis Amira Ab Rahman 2015

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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

Business Model

The business model spectrum revisited

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

Social Entrepreneurship Business Model

Dr Anis Amira Ab Rahman 2015

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

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

Conclusion

 

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