In pursuit of the dual aims of doing well (financially) and doing good (achieving positive social change), the socially responsible business has a multitude of options when it comes to legal structure. A nonprofit organization spins off a commercial enterprise derived from its programmatic work and creates a source of income; a commercial start up business with an innovative idea collaborates with a nonprofit to offer its product to benefit remote communities without access to resources; an entrepeneur seeking to make a profit and create jobs establishes a benefit corporation.
As the landscape of legal forms evolves to fulfill the objectives of the emerging “fourth sector” of business, finding the most efficent and effective path to take in order to generate revenue, ensure financial sustainability and generate returns for investors while achieving social outcomes presents a challenge to the entrepeneur.
At Perlman & Perlman, our attorneys have been assisting social entrepeneurs for more than fifteen years. We have in-depth knowledge of the means by which they can achieve their vision. Upon analyzing the client’s business plan, we map a strategy for establishing the entities, raising capital, planning for business operations, and growth. We use a variety of legal forms and techniques in planning strategies that are suited to the needs of each venture and designed to yield the best results over time. Finally we work hand in hand with our clients to make sure those strategies are implemented in an efficient and effective manner.
- Formation and Financing of Socially Responsible Businesses
- Governance, Strategy, Compliance
- Raising Funds
- Assisted a start-up bakery in a mid-Atlantic city struggling with unemployment and a weakened business base to create living-wage jobs and source ingredients from local suppliers, thus strengthening the local economy and its own consumer base. We helped the founder to establish a corporate structure that embedded the social mission into the company’s DNA. We represented the business in raising capital, mediating the interests of the founders and investors, and finally helped it to expand its operations and achieve financial success.
- When a nonprofit travel business offering volunteer opportunities to people seeking a cultural immersion experience suffered a sharp downturn in its business during the economic recession of 2008, we assisted them in merging with a for-profit business, creating a safe exit strategy for the nonprofit while maintaining the social mission of the enterprise and creating an upside for the founder.
- A nonprofit which developed medical equipment for use in rural clinics of developing countries began by selling equipment to foundations that placed the equipment in clinics they were supporting outside of the U.S. However, other markets and customers came forward, and the company needed freedom to grow independently. After separating from the parent nonprofit, the business has grown successfully and the profits are used to support the nonprofit’s mission.