New Hybrid Business Entities Combine Businesses, Social Missions

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A social entrepreneur has a mission: to launch a successful business, but also to combine profitability with a broader societal purpose. Whether that purpose is environmental sustainability or fair trade, it may not always be compatibility with maximizing profits.

That's where boards of traditional business corporations face a dilemma.Sell the company to the highest bidder, or to one that will carry out the company's social mission? Corporate boards generally have a duty to maximize shareholder value in approving a sale or merger. That may mean an obligation to opt for money over mission, or face legal action.

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Published In: Business Organization Updates, Nonprofits Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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