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The Emerging Need For Hybrid Entities: Why California Should Become The Delaware Of "Social Enterprise Law", Ross Kelley

Loyola of Los Angeles Law Review

Recognizing the limitations and restraints posed on socially conscious for-profit organizations, several states have begun to develop a legislative model that blends attributes of traditional for-profit and not-for-profit entities into “hybrid” organizations. Chief among these states is California, which has emerged as a leader of this new social enterprise reform. California is the only state to allow a business to incorporate as a Benefit Corporation or a Flexible Purpose Corporation. Additionally, the state legislature has proposed a third type of hybrid entity—the Low-Profit Limited Liability Company. By addressing the limitations of the traditional corporate structure, California’s new hybrid entities afford …