Boston, MA asked in Business Formation and Business Law for Massachusetts

Q: What is a Social Enterprise Characterized under, an LLC or Non-Profit Status?

I have a Social Business Idea that has a few ways to be monetized and I don't want to be completely limited by the Non-Profit sector. I want to file for incorporation but don't know what Umbrella a Social Enterprise falls under.

2 Lawyer Answers

John Espinosa

  • Lowell, MA
  • Licensed in Massachusetts

A: In Massachusetts, one option is a benefit corporation. Here is some info about how it works:

And here is the relevant statute in its entirety:

Kas DeCarvalho


A: The answer partially depends on what you're trying to accomplish: If the proposed purpose is solely benefit-related, without the desire or need to assign profits or owners/shareholders/members, then you're probably in (traditional) non-profit corporation territory. Alternately, you may be referring to any one of several, relatively new types of for-profit vehicles with an attached social benefit purpose or which case your options depend partially on the State law where you proposed to form the entity, but may include options fitting into either the corporation or the LLC structure types, such as Social Benefit Corporations (B-Corps) or Low-Profit Limited Liability Companies (L3C). Short answer: "You have options."

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