which generates income and profit. The entity sells products or A business model, services in demand by the market. Malaysian social enterprises are entitled to pay dividends to investors reinvesting a certain portion back into the business.” “after MaGIC adds that social enterprises have the following secondary characteristics: fair compensation and returns, responsible and transparent, inclusive equity and just governance. A consultant in this field, Tandemic, also makes clear that social enterprises combine both a social cause with the use of a private sector business model. In their proposed definition, however, “there are no limitations on the dividends issued to investors in a social enterprise.” There remains a lack of clarity in Malaysia on some of the key features of social enterprise. Legal Form Malaysia does not have a specific legal structure for social enterprise. Founders of social enterprise will typically resort to one of the traditional legal forms already provided for, including private limited companies and associations. They will typically make changes to the legal form so that it enables social enterprise. Since there is no legal or working definition of social enterprise provided by the government, founders rely on components of social enterprise that they believe are important to qualify as a social enterprise. In particular, there is a strong influence from the United Kingdom, with a range of social enterprise founders returning from studying and working in the United Kingdom (Grave 2014). Accordingly, some legal forms in Malaysia have been adapted by the founders to follow the U.K. CIC. This includes opting for a business that can be measured against its social objective (the U.K. community interest test), which benefits from an asset lock and restricts the payment of dividends. These restrictions can be built into the Malaysian company form (Arkitek 2014). LEARNED ACROSS COUNTRIES Common Features in Definitions of Social Enterprise Table 8 lists the common features when comparing the three countries where the governments adopted either a legal (Italy and South Korea) or working (United Kingdom) definition of social enterprise. Table 8. Common features when comparing definitions across Italy, South Korea, and the United Kingdom Feature of the Italy South Korea United Kingdom definition Any legal form There is a broad list of forms
A business model, which generates income and profit. The entity sells products or services in demand by the market. Malaysian social enterprises are entitled to pay dividends to investors “after reinvesting a certain portion back into the business.” MaGIC adds that social enterprises have the following secondary characteristics: fair compensation and returns, responsible and transparent, inclusive equity and just governance. A consultant in this field, Tandemic, also makes clear that social enterprises combine both a social cause with the use of a private sector business model. In their proposed definition, however, “there are no limitations on the dividends issued to investors in a social enterprise.” There remains a lack of clarity in Malaysia on some of the key features of social enterprise. Legal Form Malaysia does not have a specific legal structure for social enterprise. Founders of social enterprise will typically resort to one of the traditional legal forms already provided for, including private limited companies and associations. They will typically make changes to the legal form so that it enables social enterprise. Since there is no legal or working definition of social enterprise provided by the government, founders rely on components of social enterprise that they believe are important to qualify as a social enterprise. In particular, there is a strong influence from the United Kingdom, with a range of social enterprise founders returning from studying and working in the United Kingdom (Grave 2014). Accordingly, some legal forms in Malaysia have been adapted by the founders to follow the U.K. CIC. This includes opting for a business that can be measured against its social objective (the U.K. community interest test), which benefits from an asset lock and restricts the payment of dividends. These restrictions can be built into the Malaysian company form (Arkitek 2014). LEARNED ACROSS COUNTRIES Common Features in Definitions of Social Enterprise Table 8 lists the common features when comparing the three countries where the governments adopted either a legal (Italy and South Korea) or working (United Kingdom) definition of social enterprise. Table 8. Common features when comparing definitions across Italy, South Korea, and the United Kingdom Feature of the definition Italy South Korea United Kingdom Any legal form There is a broad list of forms
114405-18-4-2017-15-11-50-DesignLegalFrameworksforSEsApr.docx