The (svb) Company as an Alternative for Social Enterprises in the Welfare Industry.

Abstract: Private entrepreneurship as a response to the social challenges of society is a hot topic today. As a consequence, during the last two decades the public sector has been in competition with private actors delivering welfare services funded by public financing. At the same time, public opinion poll figures indicate an increasing distrust against private for-profit actors in tax-financed industries. A way of solving the equation could be found in the social enterprise; a company with a social purpose, but which runs and finances its activities by using businesslike methods. However, the social enterprise has a challenge in finding a suitable legal body to represent its activities. A not-for-profit purpose combined with businesslike methods must be both theoretically possible and feasible to sustain through the regulations of the legal body. The setup of a limited liability company is an optimal match when it comes to the methods, providing possibilities for self-financing and sustainable business without donations, but the social purpose is not so easily incorporated, since shareholder supremacy allows the purpose to be changed if it is the will of the owners. An alternative to the traditional limited liability company can be found in the (svb) company; a particular type of limited liability company. The important ingredient is a limitation on how much of the yearly profit can be transferred out of the company. The (svb) company can utilize the same businesslike methods as any other limited liability company, but with a social purpose. This means that the (svb) company could be appealing to the public in a unique way and serve as a better alternative for the social enterprise than the limited liability company does. Nevertheless, there are only 89 (svb) companies registered at Bolagsverket today, even though the possibility to start a company of (svb) type has existed since 2006, when chapter 32 was introduced to the Companies Act. However, the failure is not in the lack of demand or impossible rationale of not-for-profit, but in the political implementation of the (svb) company, which has made it unappealing to the social entrepreneur. The function of the (svb) company is still a good match for the needs of a social enterprise that should not be forgotten in the Swedish company landscape.