Information on Social Enterprises

CONTENT

What is a Social Enterprise?

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A company or organization which performs business activities while putting priority on the pursuit of social purposes

Social Purpose

  • Offer jobs or social services to vulnerable social groups. (vulnerable social groups: low-income brackets, the aged, the handicapped, victims of prostitution, long-term jobless, women with severed career, etc.)
  • Promote development of local community and public interest.
  • Promote democratic decision-making process (with the participation of stakeholders including the recipients of services, workers and local residents).
  • Reinvest profits for the realization of social purposes. (a corporation according to commercial law: more than ⅔ of profits)

Business Activities

  • Various types of organization are recognized including no-profit incorporation and organization, cooperative and companies as stipulated by commercial law.
  • Employs paid workers.
  • Profits made by business activities should be more than 30% of the labor (personnel) cost.
Business Activities
Legal concept of a social enterprise (Article 2 of the Law on the Promotion of Social Enterprises)
  • A company which does business activities of producing and selling products and services while pursuing such social purposes as providing vulnerable social groups with social services or jobs to improve the quality of life of the local residents.
  • A company which reinvests profits in the business or the local community putting priority on pursuing social purposes rather than on maximizing profits for shareholders or owner of the company.
Types of social enterprise

Social enterprises are classified into 5 types in Korea according to their social purposes.

  • 1. Job-creation Type: The main purpose of the enterprise is to offer jobs to vulnerable social groups.
  • 2. Social Service Provision Type: The main purpose of the enterprise is to provide vulnerable social groups with social services.
  • 3. Mixed Type: Job-creation Type + Social Service Provision Type
  • 4. Other Types: A social enterprise of which realization of social purposes is difficult to judge on the basis of the ratio of employment or provision of social service.
  • 5. Local Community Contribution Type: An enterprise which contribute to the improvement in the quality of life of the local community. (newly defined in 2011)

Realize sustainable economy and social integration by fostering social enterprises.

Offer sustainable jobs.
Integrate vulnerable social groups into the labor market. Expand good and worthwhile jobs.
Activate local society.
Integrate the local community. Develop the local economy through expansion of social investment.
Expand social service.
Satisfy the need for new public services. Innovate public services.
Spread ethical market.
Spread companies’ social contribution and ethical management culture. Create a good consumption culture.
  • The number of workers including vulnerable social groups is increasing according to the increase of social enterprises.
  • The average number of paid workers in a social enterprise is 24.1. (counted at time of certification)

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