2 - Corporate Purpose

Summary

This chapter argues that the existing corporate laws of the four Asian jurisdictions and the laws regulating social enterprises in the US and UK that deal with purpose are generally ineffective in preventing the subordination of social benefit to profit; the laws are inadequate to ensure that social benefit is prioritized. Thus, I argue that in my proposed legal form, under the first criterion, there should be a requirement to the following effect that “on the whole, the pursuit and delivery of social benefit is prioritised over profit-making except where doing so will have a material and adverse effect on the financial viability of the social enterprise.” To make this argument, I first distinguish between corporate interest, corporate object, and corporate interest. I then examine the company laws of the four common law Asian jurisdictions, followed by the US benefit corporation and social purpose corporation as well as the UK community interest company. Subsequently, I propose a corporate purpose to which social enterprises should adhere and I show how this purpose can be privately and publicly enforced.