Italy: Social enterprise finally becomes law

Italian civil society can breath a sigh of relief: on the 24th January the Italian Minister for the economy and the Minister for social affairs finally emitted the decrees that allow the law on social enterprise (drawn up in 2005) to be put into practice.

?A social enterprise is an enterprise that makes at least 70% of its revenue through activities that have a social benefit? states article 2 of the law on Social Enterprise. The first of the four recently emitted decrees now outlines how to calculate and define this 70% that marks the border between ?enterprise? and ?social?. And the decree explicitly excludes revenue from financial or real estate investment and capital gains from the percentage of socially sourced returns.

The second decree defines the procedures that social enterprises must follow to legally register their activities including the documents and acts that have to be presented. For example, along with the statute and social balance enterprises wanting to register as social enterprises must also present a document with detailed information about their economic activity, that will be closely scrutinised.

As far as the social balance is concerned (in Italy social balance?s were made obligatory by the 2005 social enterprise law) the third decree gives the guidelines that these are to follow. The information about governance, administration and management that must be included in a balance to make it ?social? is outlined step by step.

Finally, the fourth and last decree indicates the methods that organisations that use the social enterprise formula to transform, fuse, or lease their existing structures should adopt. For such ?out of the ordinary? cases, the Ministry for social affairs must open a consultation that can last up to 90 days to ensure that operations are legal and admissible.

But even though every one has been waiting for these decrees, Italy?s third sector forum is not happy. ?We do not wish to express our opinions on the text? explained the forum?s spokespeople, ? but we are displeased with the fact that we were not consulted and indeed not informed. There hasn?t been a trace of that collaborative spirit that we believe is necessary when making laws that will affect the sector?.