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Conference Papers Year : 2019

The Interest in Creating a New Legal Concept : Limited Lucrativity

De l’intérêt de créer un nouveau concept : la lucrativité limitée

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Abstract

The notion of non-profit is one of the foundations of the social economy. However, this reality is never accepted as a structuring criterion in Union law. Based on an analysis of European Union law rules and the case law of the European Court of Justice (ECJ), the purpose of this article is first to show that the concept of non-profit- making is not operational to distinguish profit-making enterprises from social economy enterprises. On this basis, the second question will be to determine what can be done to promote a better legal recognition of the social economy and its particularities in the European system. The Treaty on the Functioning of the European Union defines two categories of organisations: on the one hand, those organisations that do not seek profit and, on the other hand, civil or commercial law companies, which include cooperative companies. Under European Union law, certain associations, as well as all mutuals and cooperatives, are grouped together with profit-making companies. Wheter an entity is described, under its national law, as a non-profit or for-profit entity never has any beary on the application of Union’s law. It is therefore difficult to find examples in positive law where the absence of profit is valued per se and could be considered in the application of internal market and competition legislation. However, this reality has an impact on the way economic activity is carried out. Social economy enterprises therefore do not find their place in the current legal 6 frameworks. They are positioned in the same competitive perimeter as for-profit companies. How can the singularity of social economy enterprises in terms of limited profit distribution be reflected in the European Union laws? According to the binary classification currently used, neither their complete assimilation into the for-profit category nor their classification as non-profit enterprises reflect what social economy enterprises are and their needs. The first step of a useful response was taken by the ECJ in a decision concerning cooperatives. The ongoing work of the European Commission and the European Parliament to promote the concept of social enterprise in European Union law also offers interesting avenues for reflection. To go even further, we propose to introduce into EU law the notion of limited lucrativity, which would define all organisations (sometimes also called “not-for-profit entities”) which are likely to make profits but which are not intended to distribute them to their owners because their final purpose is different. This European concept would be operational because it could lead to the application of specific rules, for example on competition, public procurement or taxation. In any case, the aim would be to restore the conditions for free and undistorted competition with profit-making companies that are not subject to the same constraints on access to capital. The introduction of this concept into Union law would lead to better political recognition and legal translation at European level of one of the strong characteristics of social economy enterprises

Dates and versions

hal-03890048 , version 1 (08-12-2022)

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Laetitia Driguez. De l’intérêt de créer un nouveau concept : la lucrativité limitée. 7th CIRIEC International Research Conference on Social Economy "Social and Solidarity Economy: Moving Towards a New Economic System",, CIRIEC, Jun 2019, Bucarest, Roumanie. pp.No. 2019/08, ⟨10.25518/ciriec.wp201908⟩. ⟨hal-03890048⟩
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