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A Study On The Improvement Of The Social Enterprise Promotion Act

  • Legal Theory & Practice Review
  • Abbr : LTPR
  • 2025, 13(2), pp.401~441
  • Publisher : The Korea Society for Legal Theory and Practice Inc.
  • Research Area : Social Science > Law
  • Received : April 9, 2025
  • Accepted : May 23, 2025
  • Published : May 31, 2025

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1광주여자대학교

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ABSTRACT

The Social Enterprise Promotion Act was enacted on December 8, 2006, and came into effect on July 1, 2007. Social enterprises established under this law prioritize social objectives while engaging in business activities. These entities represent a hybrid model between for-profit and non-profit organizations, simultaneously pursuing profit and addressing social issues. Their goals include creating social value by providing jobs or social services to vulnerable groups, contributing to local communities, and addressing societal challenges. However, despite their dual focus on social objectives and business operations, many social enterprises face difficulties achieving sustainable growth. Key challenges include financial constraints, sustainability issues, institutional limitations, lack of expertise, and shortcomings in government policies. To overcome these obstacles, it is essential to improve institutional frameworks and strengthen the business capabilities of social enterprises. This paper aims to analyze the issues surrounding social enterprises in South Korea, focusing on the Social Enterprise Promotion Act, and to propose improvement measures. First, it explains the concept and characteristics of social enterprises, including their pursuit of social objectives, revenue generation through business activities, democratic decision-making structures, reinvestment of profits for social purposes, and the employment of and provision of services to vulnerable groups. Additionally, it analyzes key aspects of the Social Enterprise Promotion Act, such as the certification system and support measures. The paper identifies current issues with the existing system for social enterprises, including rigid certification criteria, the complexity of certification procedures, difficulties in evaluating the realization of social objectives, increased dependency on financial support, sustainability challenges after support ends, and a lack of incentives for private sector participation and investment. As improvement measures, it is proposed to make the certification system more flexible and simplified, relax and specify certification requirements, develop differentiated evaluation indicators, create innovative models and explore funding options, promote investment and establish public-private partnership models, introduce a social enterprise mutual aid system, and enact new regulations to encourage startups. Through such amendments to the Social Enterprise Promotion Act, there is a need to establish a flexible and effective support system, enhance the social value evaluation system, activate private participation and investment, and strengthen the self-innovation and competitiveness of social enterprises. By doing so, social enterprises are expected to grow into key entities that contribute to solving social problems and achieving sustainable development.

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