Social profit companies in the European Union: towards a theoretical framework and adequate regulation

The past quarter century has seen an increased demand for socially and environmentally responsible entrepreneurship by investors, consumers, business partners and employees. Member states’ legislators have responded by adopting specific social profit statutes for companies with (an)other main purpose(s) than or besides profit maximization. Despite a recent call for regulatory intervention by the European Parliament, the European Union has not stepped in so far, thereby in effect relying on member states’ initiatives. This project aims to analyse whether and how the European Union should adopt specific regulation with respect to social profits, based on the following subquestions: -  Is there a need for specific social profit statutes? Firstly, it is important to asses the rationale for specific social profit statutes, from a (traditional and behavioral) law and economics perspective. This will involve an analysis of the (in)adequacy of traditional for-profits and non-profits to fully respond to the increased demand for socially and environmentally responsible entrepreneurship. - Can and should the EU intervene? Answering this subquestion will require an analysis of (i) regulatory competition for social profit charters, for instance focusing on the United States’ example (with more than 30 states having adopted benefit corporation statutes), and (ii) the (extent of the) EU’s competences. - How should the EU intervene? Based on a comparative analysis of existing social profit statutes in members states of the EU and beyond (e.g. the United States and the United Kingdom), as well as a private social enterprise certifications (such as the B Corporation), this final part seeks to provide normative proposals with respect to the most adequate type of regulatory intervention.