This Note elaborates on the introduction of a new legal structure for organizations known as the “hybrid entity.” A hybrid encompasses aspects of both the for-profit model, to generate revenue; as well as the nonprofit model, to distribute funds to a community in need. The objective of this Note is to offer a structural guide to entrepreneurs who are interested in this new model. This Note first examines the limitations of for-profits that would like to contribute to social goals, as well as the limitations of nonprofits that wish to increase their revenues. This Note then discusses two current statutory models for the hybrid: the Low-Profit Limited Liability Company in the United States, and the Community Interest Company in the United Kingdom. Finally, this note elaborates on a current international movement, known as the Economy of Communion, to enable the reader to visualize the social impact of a hybrid structure. In particular, this Note focuses on the intricacies of how to distribute profits in such a model. The Note concludes by offering the Economy of Communion as one efficient means of distributing profits, and enumerates ways the United States' model can learn from its counterparts abroad.
Hybrid Entities: Distributing Profits With A Purpose,
17 Fordham J. Corp. & Fin. L. 261
Available at: https://ir.lawnet.fordham.edu/jcfl/vol17/iss1/7