Social enterprise (legal status)

03 Sep, 2023

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Non-profit legal entities (association, institution, institution), as well as commercial companies, cooperatives or other legal entities of private law, which are not established solely for the purpose of acquisition, can acquire the status of a social enterprise. The Slovenian Social Enterprise Act (SSP, 2011) defines the definition, goals, principles and activities of a social enterprise in Slovenia, and the legal status of a social enterprise is available for legal forms that meet the prescribed conditions.

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The status of a social enterprise may be aquired if:

1. The main purpose of social entrepreneurship is to employ the long-term unemployed and to
encourage them to generate income independently and take care of their own survival within the
framework of social entrepreneurship.
2. The do not have profit making as the main goal of its activities, do not distribute the received
profit among the shareholders or members of organisation.

There are some requirements, in dependance on the legal status.
A non-profit legal entity may operate as a social enterprise if it acquires the status of a social enterprise.
A for-profit company cannot set up a social enterprise to which it would transfer part of the company or activity, but it can provide new jobs for its redundant workers by setting it up.

Social entrepreneurship includes non-profit legal entities that are established and operate according to the following principles (hereinafter: principles), which demonstrate their social character:

1. they are established on the basis of a voluntary decision of the founders (autonomous initiative);

2. the purpose of the establishment is not exclusively the acquisition of profit, assets and surpluses of income over expenses are invested in the activity of the social enterprise, and the division of surpluses of income over expenses is not admissible (non-profit);

3. they are established for the purpose of permanent activities and may be established for the purpose of employing the most vulnerable groups of people on the labor market, which is also in the public interest (performing activities in the public interest);

4. their members act voluntarily (voluntary action);

5. they are independent in their management (independence);

6. operate in accordance with market laws (market orientation) by producing and selling products or providing services on the market;

7. may involve volunteer work (involvement of volunteer work);

8. individual founders or owners do not have a dominant influence in decision-making, decisions are made by all members on the principle of one member – one vote, regardless of the share of invested capital (equality of membership);

9. also involve stakeholders in decision-making (stakeholder participation in management);

10. ensure transparent financial operations and internal control over material and financial operations (transparent operations);

11. work permanently for the benefit of their members, users and the wider community (socially beneficial activities).

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