	Social Enterprise Law Surveys
	Ireland
	(Europe) Firm Arthur Cox
What jurisdiction(s) do you practice in?	Ireland
What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade ...	The most commonly used for-profit corporate organizational form in Ireland is a limited liability company as set out below (the concepts of benefit corporation and social purpose corporation are not recognized in Irish law): Private Company Limited by Shares (LTD company)- The members' liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number of shareholders is 149. An LTD company can have only one director if it chooses. An LTD company does not have stated objects and can undertake any activity. Designated Activity Company (DAC)- The members' liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number of members is 149. A DAC company must have at least 2 directors. Constitution includes a memorandum and articles of association. Company Limited By Guarantee (CLG)- The members' liability is limited to the amount they have undertaken to contribute to the assets of the company, in the event it is wound up, not exceeding the amount specified in the memorandum. As a guarantee company does not have a share capital, the members are not required to buy any shares in the company. Many charitable and professional bodies find this form of company to be a suitable vehicle as they wish to secure the benefits of separate legal personality and of limited liability but do not require raising funds from the members. a. Enterprises that seek financing from investors and will have multiple owners tend to form a Private Company Limited by Shares (LTD company). b. The most common for-profit organizational form used by Social Enterprises is the Designated Activity Company.
Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required...	Where a company has objects they are required to consider them. Social Enterprises have an objective to achieve social, societal or environmental impact rather than maximizing profits for their owners or shareholders. The objective is achieved by reinvesting surpluses into achieving social objectives. This must be considered when the enterprise is operational. There are statutory fiduciary duties that directors of a CLG/DAC owe to a company under the Companies Act 2014 which include (among other duties) acting in good faith, in what the director considers to be the best interest of the company, to act in accordance with the company’s constitution and to exercise powers only for lawful purposes. In doing so, directors are advised to have regard to the interests of the company’s members and employees.
Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so:a. What type(s) of organizational forms are they?b. How do they materially differ from the most closely analogous traditional organizational ...	There is no organizational form specifically designed for Social Enterprises in Ireland, however, the Company Limited by Guarantee (CLG) is the most common form currently used by social enterprises.
Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporat...	Yes, Social Enterprises can be structured as a for-profit or non-profit. No there is no differential treatment. There is no distinction between non-profits that are social enterprises and non-profits that are not social enterprises. No. We don’t have any statistics on this but in our practice, we would generally see Social Enterprises as non-profits.
Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms.	Yes, worker-owned Enterprises, such as co-operatives are permitted in Ireland. The material benefits are that co-operatives are subject to less complicated regulations than limited companies. They are owned and controlled by their user members and operate for the benefit of their user members. Co-operatives also have limited liability. A restriction is that co-operatives still have the compliance burden of producing an annual return, annual audit and a register of beneficial owners return. Co-operative type entities can be structured in different ways in Ireland. Thus they can be established as industrial and provident societies, as agricultural and fishery societies or as companies. While historically many co-operatives could enjoy an exemption from tax on their profits, that exemption largely no longer applies. However, there are some tax rules or methods of computation for tax purposes that confer preferential tax treatment on cooperatives, which are unique to them. These may be summarized as follows: To the extent that a co-operative is a mutual business and trade association, where members contribute membership fees or subscriptions to fund a particular joint endeavor or expense, any excess or surplus distributed to members or left over from the pool of funds contributed by the members is not taxable. However, any profits from transactions with third parties or investment of members’ funds is taxable. While cooperative societies are generally subject to corporation tax on income and gains, they can benefit from special computational rules which confer some preferential treatment that cannot be availed of by other companies. These are that: interest, dividends and bonuses paid by these societies to members are payable without the deduction of income tax; such interest, dividends and bonuses are not treated as distributions and therefore are deductible from profits and discounts, rebates and bonuses to members related to transactions with the co-operative are also deductible as expenses. Profits or gains arising from an exhibition or show held by an agricultural society for the society’s purposes are exempt from tax where they are applied solely to the purposes of the society.
Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to.	No, but it is hoped that now a specific government department (the Department of Rural and Community Development) has responsibility for social enterprises that there will be more structure and guidance in respect of reporting requirements.
In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples.	No.
Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe.	ESG disclosures are required under the European Union (Disclosure of Non-Financial and Diversity Information by Certain Large Undertakings and Groups) Regulations 2017, S.I. No. 360 of 2017 in the annual reports of the following companies public companies listed on a regulated market in the EU; insurance undertakings; undertakings designated by law as a public-interest entity; and any public limited liability company which has an average of more than 500 employees in the company/group in respect of environmental matters (including climate-related risks, dependencies, and opportunities), (ii) social and employee matters, (iii) respect for human rights, and (iv) bribery and corruption. The real driver for disclosure is the Taxonomy Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088. The Taxonomy Regulation applies to regulated investment funds rather than the actual listed PLCs in which the funds invest. As this is an EU Regulation, it is part of Irish law.
Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe.	No.
Does your jurisdiction have any ESG requirements for investors? If it does, please describe.	No.
Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements.b. If they are not, are they permi...	a. In respect of pension funds, the Recitals to IORP II are clear that environmental, social and governance (ESG) factors are important for the investment policy and risk management systems of IORPs. IORP II details that EU Member States should require IORPs to explicitly disclose where such ESG factors are considered in investment decisions and how they form part of their risk management system. From the perspective of mutual funds as investors, there is currently no direct requirement on the fund products to consider ESG issues when making investment decisions unless specifically called out in the prospectus for the relevant fund that it is part of the investment policy. However, funds will be impacted indirectly through the imposition of requirements around ESG issues arising from Regulation (EU) 2019/2088 of the European Parliament and the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (“SFDR”). SFDR places requirements on the managers of funds, as financial market participants, to develop policies on the integration of sustainability risks into their investment process, to publish details of these, the manner in which sustainability risks are integrated into their investment decisions and the results of the assessments of the likely impacts of sustainability risks on the returns of the financial product. The position taken on this will be delegated to the investment manager and so there will be transparency on approach and it will drive more consideration of ESG issues than previously. SFDR is effective from 10 March 2021 and applies to financial market participants, including alternative investment fund managers (in respect of alternative investment funds, AIFs) and the management company of a UCITS, including self-managed UCITS and MiFID investment managers. b. The impact of the disclosure requirements on managers of funds will mean that it is clear in the pre-contractual documents whether a product is considering sustainability or ESG issues. If there is a negative statement, then it would be inconsistent with that statement to find the fund or its manager considering ESG issues. c. In our experience investors consider a number of factors in the context of making investment decisions in funds and due diligence is done on a number of factors including the brand and reputation of the investment manager, the diversity of exposure that may be relevant to them, the independence of the board and the quality and experience of the service providers to the fund. In making investments as investors, funds will have detailed investment policies that will drive their investment that, other than value and general governance issues may look at credit rating, listing, sector and risks.
What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)?	Social Enterprises usually get their funding by way of grants, philanthropic investment and traditional investment.
How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)?	They are becoming more prevalent in particular this year. An example of this is the Impact Ireland Fund launch in Ireland in 2020.
What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government...	There is increased commitment at the government level to support social enterprises since the publication of the National Social Enterprise Policy for Ireland 2019-2022. Government funding depends on the sectors in which the Social Enterprises are involved. a. The difficulty in obtaining government funding would be dependent on the prevailing situation in the economy at the time and the availability and satisfaction of due diligence by the government on the social enterprise. b. No as we do not have this type of entity.
Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)?	Not that we are aware of.
To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction.	See response to I. 9 above. ESG disclosures are required under the European Union (Disclosure of Non-Financial and Diversity Information by Certain Large Undertakings and Groups) Regulations 2017, S.I. No. 360 of 2017 in the annual reports of the following companies public companies listed on a regulated market in the EU; insurance undertakings; undertakings designated by law as a public-interest entity; and any public limited liability company which has an average of more than 500 employees in the company/group in respect of environmental matters (including climate-related risks, dependencies, and opportunities), (ii) social and employee matters, (iii) respect for human rights, and (iv) bribery and corruption. The real driver for disclosure is the Taxonomy Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088. The Taxonomy Regulation applies to regulated investment funds rather than the actual listed PLCs in which the funds invest. As this is an EU Regulation, it is part of Irish law.
How prevalent, if at all, are impact bonds in your jurisdiction?	There is a lot of interest surrounding impact bonds, however, in practice, they are not as prevalent.
In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)?	A new EU FDI Framework was adopted in Ireland in October 2020. This framework acts as a co-operation mechanism between member states and provides for a non-exhaustive list of certain factors that the member states may take into consideration in determining whether a foreign investment is likely to affect security or public order.
Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under a...	Crowdfunding is not illegal in Ireland, but it is not currently regulated. The Central Bank of Ireland has published guidance highlighting the risk of crowdfunding given that it is an unregulated industry and risks associated with it for potential investors.
Are there any tax exemptions that are uniquely available for Social Enterprises? a. Please describe any tax exemptions that are available and whether they are partial or full.b. Are they dependent on the Social Enterprise utilized using a spe...	No- not unless they obtain charitable exempt status.
Are individuals or other organizations able to provide tax deductible donations to for-profit Social Enterprises? If they are, please describe any restrictions applicable to tax deductible donations?	No- not unless they obtain charitable exempt status.
Are there any other tax benefits uniquely available for Social Enterprises? (e.g. deferrals, favorable tax rates, business deductions, etc.)	No- not by reference to a definition of “social enterprise”.
Does your jurisdiction provide for reciprocal recognition of tax-exempt status that has been granted under the law of any other jurisdictions?	Tax reliefs generally apply to entities established in Ireland but relief is also recognized for entities that benefit from favorable tax treatment as a charity under another EU member state in line with the ECJ decisions on this topic (e.g. Stauffer, Persche and Missionswerk).
Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe.	No.
What government operational support, resources, training or services, are available for small businesses or Social Enterprises?	The Department of Enterprise, Trade and Employment provides a range of tailored supports for enterprises of all sizes in Ireland. Supports include access to finance, management development, mentoring supports, business development programs, market supports and trade promotion. It is hoped that as a result of the publication of the Irish Government’s policy framework,the Department of Rural and Community Development will work to provide a full range of supports and services for Social Enterprises.
Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are.	No.
Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness.	In July 2017, the Irish Government assigned policy responsibility for Social Enterprise to the newly established Department of Rural and Community Development. The Department’s mission is “to promote rural and community development and to support vibrant, inclusive and sustainable communities throughout Ireland”. In line with this mission, a key objective of the department was to develop a strong policy framework which it did in June 2019 and to provide a full range of appropriate supports to improve the capability of organizations that deliver services to individuals and communities, tackle social issues, and contribute to a fairer and more inclusive society. The effectiveness of this mandate has yet to be tested.
Is there a different bankruptcy system available for Social Enterprises?	No.
What are the average time and filing fees to form an Enterprise in your jurisdiction?	Applications to incorporate companies can be submitted under any one of three schemes: Ordinary: approximately 15 working days. Fé Phráinn: approximately 10 working days Online A1: approximately 5 working days Form A1 fee for a new company is €100 if done via paper application and €50 if done online.
What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well...	There is no beneficial tax status available and the funding depends on the type of funding that is being applied for.
Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction.	Yes-startups and other entrepreneurial enterprises can easily form and flourish in Ireland. Ireland is among the EU member states with a specific scheme for facilitating entry for migrant start-ups and innovative entrepreneurs. The Start-Up Entrepreneur Programme (STEP) was established in 2012. The aim of the STEP is to stimulate productive investment in Ireland by attracting high potential start-ups. Enterprise Ireland is the government agency tasked with supporting Irish startups and invested €24million in Irish Start –ups in 2019. It works with entrepreneurs and businesses to help them scale and reach new export markets through funding, market insight or access to an international network. The investments were provided through Enterprise Ireland’s High Potential Start-Up and Competitive Start Fund programs. A new regional plan “Powering the Regions” was launched in 2019 by Enterprise Ireland with €45 million under the Regional Enterprise Development Fund.
Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction.	Yes, Social Enterprises can easily form and flourish in Ireland. The Department of Rural and Community Development’s commitment to ensuring the continued growth of social enterprises is demonstrated by the publication of the National Social Enterprise Policy for Ireland 2019-2022 and it hopes the department will continue to promote and support the formation of Social Enterprises.
Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Soc...	While there are currently no laws that are to the formation of Social Enterprises, there are no laws that actively encourage them. It is hoped that the government commitment demonstrated in the National Social Enterprise Policy for Ireland 2019-2022 will have a positive impact and lead to more Social Enterprises being formed and promoted.
In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects.	No.
What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction?	As identified in the National Social Enterprise Policy for Ireland 2019-2022, the introduction of a distinct legal form for Social Enterprises would add clarity and enable Social Enterprises to flourish.
What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)?	Some changes that could be beneficial to enhance the social and environmental responsibility of enterprises generally could include, for example, requiring companies to report annually under a set list of social and environmental KPIs. This report could form part of the disclosures required to be made in the company’s statutory report and accounts so that liability would arise for the officers of the company in respect of false statements. Such KPIS could include for example: Target date by which the Company will achieve Zero Carbon and percentage achieved/change each year towards this target; Disclosure of the end of life impact of the company’s products; Disclosure of the fresh water and wastewater impact of the company’s production methods and supply chain; Disclosure in percentage terms of male/female balance by reference to salary bands of €10,000; Disclosure of all environmental convictions by the company or any of its subsidiaries; Disclosure of the number of sexual harassments complaints during the year; Disclosure of all workforce fatalities; and Confirmation of outcome of annual child labor/slavery audit of all parts of the company’s supply chain.
Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not?	No.

Social Enterprise Law Surveys

Back XLS

What jurisdiction(s) do you practice in?

Ireland

What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade ...

The most commonly used for-profit corporate organizational form in Ireland is a limited liability company as set out below (the concepts of benefit corporation and social purpose corporation are not recognized in Irish law):

Private Company Limited by Shares (LTD company)- The members' liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number of shareholders is 149. An LTD company can have only one director if it chooses. An LTD company does not have stated objects and can undertake any activity.
Designated Activity Company (DAC)- The members' liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number of members is 149. A DAC company must have at least 2 directors. Constitution includes a memorandum and articles of association.
Company Limited By Guarantee (CLG)- The members' liability is limited to the amount they have undertaken to contribute to the assets of the company, in the event it is wound up, not exceeding the amount specified in the memorandum. As a guarantee company does not have a share capital, the members are not required to buy any shares in the company. Many charitable and professional bodies find this form of company to be a suitable vehicle as they wish to secure the benefits of separate legal personality and of limited liability but do not require raising funds from the members.

a. Enterprises that seek financing from investors and will have multiple owners tend to form a Private Company Limited by Shares (LTD company).

b. The most common for-profit organizational form used by Social Enterprises is the Designated Activity Company.

Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required...

Where a company has objects they are required to consider them.

Social Enterprises have an objective to achieve social, societal or environmental impact rather than maximizing profits for their owners or shareholders. The objective is achieved by reinvesting surpluses into achieving social objectives. This must be considered when the enterprise is operational.
There are statutory fiduciary duties that directors of a CLG/DAC owe to a company under the Companies Act 2014 which include (among other duties) acting in good faith, in what the director considers to be the best interest of the company, to act in accordance with the company’s constitution and to exercise powers only for lawful purposes. In doing so, directors are advised to have regard to the interests of the company’s members and employees.

Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so:a. What type(s) of organizational forms are they?b. How do they materially differ from the most closely analogous traditional organizational ...

There is no organizational form specifically designed for Social Enterprises in Ireland, however, the Company Limited by Guarantee (CLG) is the most common form currently used by social enterprises.

Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporat...

Yes, Social Enterprises can be structured as a for-profit or non-profit.

No there is no differential treatment.
There is no distinction between non-profits that are social enterprises and non-profits that are not social enterprises.
No.
We don’t have any statistics on this but in our practice, we would generally see Social Enterprises as non-profits.

Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms.

Yes, worker-owned Enterprises, such as co-operatives are permitted in Ireland. The material benefits are that co-operatives are subject to less complicated regulations than limited companies. They are owned and controlled by their user members and operate for the benefit of their user members. Co-operatives also have limited liability. A restriction is that co-operatives still have the compliance burden of producing an annual return, annual audit and a register of beneficial owners return.

Co-operative type entities can be structured in different ways in Ireland. Thus they can be established as industrial and provident societies, as agricultural and fishery societies or as companies. While historically many co-operatives could enjoy an exemption from tax on their profits, that exemption largely no longer applies. However, there are some tax rules or methods of computation for tax purposes that confer preferential tax treatment on cooperatives, which are unique to them. These may be summarized as follows:

To the extent that a co-operative is a mutual business and trade association, where members contribute membership fees or subscriptions to fund a particular joint endeavor or expense, any excess or surplus distributed to members or left over from the pool of funds contributed by the members is not taxable. However, any profits from transactions with third parties or investment of members’ funds is taxable.
While cooperative societies are generally subject to corporation tax on income and gains, they can benefit from special computational rules which confer some preferential treatment that cannot be availed of by other companies. These are that:
- interest, dividends and bonuses paid by these societies to members are payable without the deduction of income tax;
- such interest, dividends and bonuses are not treated as distributions and therefore are deductible from profits and
- discounts, rebates and bonuses to members related to transactions with the co-operative are also deductible as expenses.
Profits or gains arising from an exhibition or show held by an agricultural society for the society’s purposes are exempt from tax where they are applied solely to the purposes of the society.

Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to.

No, but it is hoped that now a specific government department (the Department of Rural and Community Development) has responsibility for social enterprises that there will be more structure and guidance in respect of reporting requirements.

In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples.

No.

Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe.

ESG disclosures are required under the European Union (Disclosure of Non-Financial and Diversity Information by Certain Large Undertakings and Groups) Regulations 2017, S.I. No. 360 of 2017 in the annual reports of the following companies public companies listed on a regulated market in the EU; insurance undertakings; undertakings designated by law as a public-interest entity; and any public limited liability company which has an average of more than 500 employees in the company/group in respect of environmental matters (including climate-related risks, dependencies, and opportunities), (ii) social and employee matters, (iii) respect for human rights, and (iv) bribery and corruption.

The real driver for disclosure is the Taxonomy Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088. The Taxonomy Regulation applies to regulated investment funds rather than the actual listed PLCs in which the funds invest. As this is an EU Regulation, it is part of Irish law.

Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe.

No.

Does your jurisdiction have any ESG requirements for investors? If it does, please describe.

No.

Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements.b. If they are not, are they permi...

a. In respect of pension funds, the Recitals to IORP II are clear that environmental, social and governance (ESG) factors are important for the investment policy and risk management systems of IORPs. IORP II details that EU Member States should require IORPs to explicitly disclose where such ESG factors are considered in investment decisions and how they form part of their risk management system.

From the perspective of mutual funds as investors, there is currently no direct requirement on the fund products to consider ESG issues when making investment decisions unless specifically called out in the prospectus for the relevant fund that it is part of the investment policy. However, funds will be impacted indirectly through the imposition of requirements around ESG issues arising from Regulation (EU) 2019/2088 of the European Parliament and the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (“SFDR”). SFDR places requirements on the managers of funds, as financial market participants, to develop policies on the integration of sustainability risks into their investment process, to publish details of these, the manner in which sustainability risks are integrated into their investment decisions and the results of the assessments of the likely impacts of sustainability risks on the returns of the financial product. The position taken on this will be delegated to the investment manager and so there will be transparency on approach and it will drive more consideration of ESG issues than previously. SFDR is effective from 10 March 2021 and applies to financial market participants, including alternative investment fund managers (in respect of alternative investment funds, AIFs) and the management company of a UCITS, including self-managed UCITS and MiFID investment managers.

b. The impact of the disclosure requirements on managers of funds will mean that it is clear in the pre-contractual documents whether a product is considering sustainability or ESG issues. If there is a negative statement, then it would be inconsistent with that statement to find the fund or its manager considering ESG issues.

c. In our experience investors consider a number of factors in the context of making investment decisions in funds and due diligence is done on a number of factors including the brand and reputation of the investment manager, the diversity of exposure that may be relevant to them, the independence of the board and the quality and experience of the service providers to the fund. In making investments as investors, funds will have detailed investment policies that will drive their investment that, other than value and general governance issues may look at credit rating, listing, sector and risks.

What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)?

Social Enterprises usually get their funding by way of grants, philanthropic investment and traditional investment.

How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)?

They are becoming more prevalent in particular this year. An example of this is the Impact Ireland Fund launch in Ireland in 2020.

What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government...

There is increased commitment at the government level to support social enterprises since the publication of the National Social Enterprise Policy for Ireland 2019-2022. Government funding depends on the sectors in which the Social Enterprises are involved.

a. The difficulty in obtaining government funding would be dependent on the prevailing situation in the economy at the time and the availability and satisfaction of due diligence by the government on the social enterprise.

b. No as we do not have this type of entity.

Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)?

Not that we are aware of.

To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction.

See response to I. 9 above.

How prevalent, if at all, are impact bonds in your jurisdiction?

There is a lot of interest surrounding impact bonds, however, in practice, they are not as prevalent.

In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)?

A new EU FDI Framework was adopted in Ireland in October 2020. This framework acts as a co-operation mechanism between member states and provides for a non-exhaustive list of certain factors that the member states may take into consideration in determining whether a foreign investment is likely to affect security or public order.

Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under a...

Crowdfunding is not illegal in Ireland, but it is not currently regulated. The Central Bank of Ireland has published guidance highlighting the risk of crowdfunding given that it is an unregulated industry and risks associated with it for potential investors.

Are there any tax exemptions that are uniquely available for Social Enterprises? a. Please describe any tax exemptions that are available and whether they are partial or full.b. Are they dependent on the Social Enterprise utilized using a spe...

No- not unless they obtain charitable exempt status.

Are individuals or other organizations able to provide tax deductible donations to for-profit Social Enterprises? If they are, please describe any restrictions applicable to tax deductible donations?

No- not unless they obtain charitable exempt status.

Are there any other tax benefits uniquely available for Social Enterprises? (e.g. deferrals, favorable tax rates, business deductions, etc.)

No- not by reference to a definition of “social enterprise”.

Does your jurisdiction provide for reciprocal recognition of tax-exempt status that has been granted under the law of any other jurisdictions?

Tax reliefs generally apply to entities established in Ireland but relief is also recognized for entities that benefit from favorable tax treatment as a charity under another EU member state in line with the ECJ decisions on this topic (e.g. Stauffer, Persche and Missionswerk).

Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe.

No.

What government operational support, resources, training or services, are available for small businesses or Social Enterprises?

The Department of Enterprise, Trade and Employment provides a range of tailored supports for enterprises of all sizes in Ireland. Supports include access to finance, management development, mentoring supports, business development programs, market supports and trade promotion. It is hoped that as a result of the publication of the Irish Government’s policy framework,the Department of Rural and Community Development will work to provide a full range of supports and services for Social Enterprises.

Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are.

No.

Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness.

In July 2017, the Irish Government assigned policy responsibility for Social Enterprise to the newly established Department of Rural and Community Development.

The Department’s mission is “to promote rural and community development and to support vibrant, inclusive and sustainable communities throughout Ireland”. In line with this mission, a key objective of the department was to develop a strong policy framework which it did in June 2019 and to provide a full range of appropriate supports to improve the capability of organizations that deliver services to individuals and communities, tackle social issues, and contribute to a fairer and more inclusive society. The effectiveness of this mandate has yet to be tested.

Is there a different bankruptcy system available for Social Enterprises?

No.

What are the average time and filing fees to form an Enterprise in your jurisdiction?

Applications to incorporate companies can be submitted under any one of three schemes:

Ordinary: approximately 15 working days.
Fé Phráinn: approximately 10 working days
Online A1: approximately 5 working days

Form A1 fee for a new company is €100 if done via paper application and €50 if done online.

What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well...

There is no beneficial tax status available and the funding depends on the type of funding that is being applied for.

Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction.

Yes-startups and other entrepreneurial enterprises can easily form and flourish in Ireland.

Ireland is among the EU member states with a specific scheme for facilitating entry for migrant start-ups and innovative entrepreneurs. The Start-Up Entrepreneur Programme (STEP) was established in 2012. The aim of the STEP is to stimulate productive investment in Ireland by attracting high potential start-ups.
Enterprise Ireland is the government agency tasked with supporting Irish startups and invested €24million in Irish Start –ups in 2019. It works with entrepreneurs and businesses to help them scale and reach new export markets through funding, market insight or access to an international network. The investments were provided through Enterprise Ireland’s High Potential Start-Up and Competitive Start Fund programs.
A new regional plan “Powering the Regions” was launched in 2019 by Enterprise Ireland with €45 million under the Regional Enterprise Development Fund.

Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction.

Yes, Social Enterprises can easily form and flourish in Ireland. The Department of Rural and Community Development’s commitment to ensuring the continued growth of social enterprises is demonstrated by the publication of the National Social Enterprise Policy for Ireland 2019-2022 and it hopes the department will continue to promote and support the formation of Social Enterprises.

Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Soc...

While there are currently no laws that are to the formation of Social Enterprises, there are no laws that actively encourage them. It is hoped that the government commitment demonstrated in the National Social Enterprise Policy for Ireland 2019-2022 will have a positive impact and lead to more Social Enterprises being formed and promoted.

In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects.

No.

What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction?

As identified in the National Social Enterprise Policy for Ireland 2019-2022, the introduction of a distinct legal form for Social Enterprises would add clarity and enable Social Enterprises to flourish.

What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)?

Some changes that could be beneficial to enhance the social and environmental responsibility of enterprises generally could include, for example, requiring companies to report annually under a set list of social and environmental KPIs. This report could form part of the disclosures required to be made in the company’s statutory report and accounts so that liability would arise for the officers of the company in respect of false statements. Such KPIS could include for example:

Target date by which the Company will achieve Zero Carbon and percentage achieved/change each year towards this target;
Disclosure of the end of life impact of the company’s products;
Disclosure of the fresh water and wastewater impact of the company’s production methods and supply chain;
Disclosure in percentage terms of male/female balance by reference to salary bands of €10,000;
Disclosure of all environmental convictions by the company or any of its subsidiaries;
Disclosure of the number of sexual harassments complaints during the year;
Disclosure of all workforce fatalities; and
Confirmation of outcome of annual child labor/slavery audit of all parts of the company’s supply chain.

Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not?

No.

Social Enterprise Law Surveys

Ireland

Social Enterprise Law Surveys

Ireland

Members