Social Enterprises

Our firm guides social enterprise leaders in developing legal structures to achieve their goals – whether as a nonprofit, a business, or a hybrid entity like the L3C.  

  • Start-ups and corporate planning
    • Social entrepreneurship is a rapidly emerging field in which business and nonprofit leaders develop mission-driven enterprises.  We help to identify the legal structure that will best fulfill the business and philanthropic goals of a mission-driven enterprise.  Our team routinely counsels early-stage social enterprises on all aspects of corporate formation, including advising on governance and control issues, embedding social purpose into corporate documents, and structuring and drafting agreements related to financing.
  • Creative legal structures and tax considerations
    • Legal structures can have a material impact on a social enterprise entity’s pursuit of a dual mission of profit and social value.  The legal structure that an organization adopts sets the framework and governing rules under which it operates.  Each organizational form has certain advantages and disadvantages, depending on the characteristics of the organization.  Our attorneys assist in setting up sustainable entities by determining the optimal legal structure and by preparing applications for tax-exempt status when applicable.
  • Equity investment structuring
    • Our attorneys counsel organizations in connection with early-stage debt and equity financings for social enterprises.  For example, a quasi-equity debt security may be particularly useful for enterprises that are legally structured as nonprofits and therefore cannot obtain equity capital.  Social investors purchase these securities, which perform the function of equity and make it possible for social enterprises to offer banks and other profit-seeking lenders a competitive investment opportunity.  We assist impact-oriented social enterprises in negotiating and structuring financing documents to enable these organizations to scale the delivery of their social and environmental missions.
  • Joint ventures between nonprofit and for-profit organizations
    • Nonprofits may enter into joint ventures with for-profits to raise capital, to access the expertise possessed by their for-profit co-venturers, and to take advantage of opportunities otherwise unavailable to them.  Compliance with IRS guidelines when structuring a joint venture is crucial, as failure to satisfy IRS criteria can result in the loss of tax-exempt status.  Our law practice’s services include advising on the structuring of joint ventures and mitigating joint venture liability through well-drafted agreements, while complying with IRS requirements.
  • Federal/state tax and charitable solicitation compliance
    • Our team routinely counsels social enterprises to ensure compliance with charitable solicitation regulations and state and federal tax laws.  We evaluate how the legal structure of the enterprise will affect its taxability, as well as whether its fundraising endeavors will require registration in each state as a soliciting charity, fundraising counsel, professional fundraiser, or commercial co-venturer.  We also prepare registration applications and renewals and monitor the status of these filings with state charitable solicitation regulators.