BUSINESS and individuals have been warned not to use the designation “social enterprise” to advertise their businesses under a proposed legislation.
If they used the words without official approval, they could be fined Bt2,000 a day for every day of business operation.
The new law to govern social enterprises is expected to be implemented in the middle of this year, said a senior government official.
The director-general of the Office of Small and Medium Enterprises Promotion(OSMEP), Suwanchai Lohawatanakul, said yesterday that the definition of “social enterprise” would cover businesses, foundations, associations and other organisations instrumental to social goals such as community development, solving social issues, addressing environment problems and bridging the gap in income inequality.
He said the penalty on businesses and individuals using the designation of social enterprise without approval from the Industry Ministry would also be incorporated into the draft bill.
It will carry a daily fine of Bt2,000.
He made the statement at a public hearing on the draft social enterprise law, designed to govern and facilitate those who want to do businesses that will incorporate social causes.
The government also plans to set up a revolving fund for promoting social enterprises. The fund will be financed by part of the profits generated by social enterprises. While individuals investing in the equities of social enterprises would be allowed a tax deduction for the invested amounts, he said.
Kobsak Pootrakool, minister of Prime Minister Office, said that Deputy Prime Minister Somkid Jatusripital wanted the social enterprise bill to become law in the middle of this year. The bill is part of the government’s economic and social reform, he said, adding that the bill was expected to be submitted for Cabinet approval within a month.
The new law may require each social enterprise to reinvest 70 per cent of their profits and 30 per cent for dividends or investment returns.
He expects a boom in social enterprises after the law is put in place in the same manner as what has happened in the United Kingdom where there are thousands of social enterprises.
The law will support inspired persons to do business and create social benefits at the same time, he added.
Asked whether the government will provide seed money to the revolving fund, Kobsak said the fund would mainly be financed by donations.
Currently there are few local businesses operating as social enterprise. Kobsak said new law would provide funding to people with sound ideas.
Tentative conditions for forming a social enterprise
Goals of addressing community development, environment & social issues
70 per cent of profits to be reinvested
Revolving fund to support social entrepreneurs
Penalty for business operating as "social enterprise" without permission