Challenges of Establishing and Operating Social Enterprises

Authors

  • Mária Juhász Várkonyi University of Miskolc

DOI:

https://doi.org/10.18096/TMP.2016.02.06

Keywords:

financial statements, social enterprises, establishing, rules on civil society organisations

Abstract

A social enterprise is an organisation that is financially self-sufficient, like a conventional commercial enterprise.
However, its primary objective is to achieve the set social purposes and goals that it considers to be important rather
than maximizing profits This definition implies that social enterprises show similarities with both civil organisations
and for-profit enterprises. Consequently, there are specific challenges related to their foundation and accounting. Since
maximizing profits and social and environmental benefits are equally important during the operation of these
enterprises, the profits they generate are used to achieve further social goals and are not distributed to individual
shareholders. Thus, income from supplying goods and services constitutes the major source of their income. Successful
social enterprises generate profit which is reinvested to subsidise the social mission they have defined. Their assets can
often be used for community purposes exclusively.

Author Biography

Mária Juhász Várkonyi, University of Miskolc

Associate Professor

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Published

2016-11-15

How to Cite

Juhász Várkonyi, M. (2016). Challenges of Establishing and Operating Social Enterprises. Theory, Methodology, Practice - Review of Business and Management, 12(Special Issue), 68–74. https://doi.org/10.18096/TMP.2016.02.06