Comments by the European Center for Not-for-Profit Law to Draft Law Amendments on Social Enterprises in Moldova

The ECNL commends the work of the Social Enterprise Platform in developing the Draft Law Amendments in a highly participatory manner. The comments provided by the ECNL are based on European best practices, with special regard to the examples of France, Italy, Lithuania, Slovenia, and Spain. The document highlights priority issues and is divided into two parts: general comments and detailed comments and recommendations. The ECNL emphasizes that social enterprises combine the tools and strategies of a business with social values and goals. The European Commission's Social Business Initiative aims to support the creation of social enterprises by making it easier for them to obtain funding, increasing their visibility, and making the legal environment friendlier. The European Economic and Social Committee (EESC) also endorses the efforts of the European Commission, considering social enterprises as drivers of social innovation. The ECNL welcomes the positive aspects of the Draft Law Amendments, including the establishment of a legal framework for social entrepreneurship in Moldova, recognition of two types of social enterprises, and provision of tax and other benefits for organizations engaged in social entrepreneurship. However, the ECNL suggests several issues for further discussion, including the narrow scope of social entrepreneurship, the limited list of social entrepreneurship activities, and the procedure for granting social enterprise status. The ECNL argues that the Draft Law Amendments define a relatively narrow scope of social entrepreneurship, limiting the possibility for CSOs without a public utility status and businesses/corporations established by individuals, CSOs without a public utility status to carry out social entrepreneurship activities. The list of social entrepreneurship activities is also narrow and does not recognize other socially useful activities. The ECNL recommends that the Draft Law Amendments should be revised to allow organizations without a public benefit, public utility, or charity status to operate as social enterprises. The ECNL also suggests that the procedure for granting social enterprise status should be simplified and that the list of social entrepreneurship activities should be expanded to include other socially useful activities. In terms of scope, the ECNL argues that social entrepreneurship is generally based on the principle of combining the social purpose with entrepreneurial spirit in the organization, while the legal form of social enterprises has a secondary nature. In many European countries, organizations with a variety of legal forms may carry out social entrepreneurship activities. The ECNL suggests that the Draft Law Amendments should be revised to allow organizations with different legal forms to engage in social entrepreneurship activities. The ECNL also recommends that the Draft Law Amendments should be revised to allow mixed or for-profit organizations to carry out social entrepreneurship activities, provided they abide by special social, economic, and governance criteria. The ECNL suggests that cooperatives and share companies should be allowed to engage in social entrepreneurship activities, regardless of the founding individual and/or legal entity. In conclusion, the ECNL welcomes the efforts of the Social Enterprise Platform in developing the Draft Law Amendments and commends the work of the European Commission and the EESC in promoting social entrepreneurship. However, the ECNL suggests several revisions to the Draft Law Amendments to allow for a more inclusive and flexible framework for social entrepreneurship in Moldova.