EIMIN: Opening up even more opportunities for social businesses
The Ministry of the Economy and Innovation (EIMIN) has drawn up a description of the procedures for obtaining and losing the status of a social business operator in order to raise the profile of social businesses and to increase transparency and accountability in the sector. The description will provide a clearer distinction between advanced and active social businesses. It should be noted that social business operator status is obtained by registering on the Innovation Agency’s updated Social Business Platform, which now becomes the official register of social businesses.
“Social businesses tackle poverty, unemployment, public health, and other problems. Until now, they have registered on the Social Business Platform voluntarily. Therefore, with a clearer definition of social business status, it will be easy to obtain it by registering on the updated Social Business Platform. This is beneficial for both start-up social businesses that want to raise their profile, advanced social businesses that want to make an even more significant contribution to solving societal problems, and citizens who will receive information about social businesses that create more value,” said Aušrinė Armonaitė, Minister of the Economy and Innovation.
In line with the amendments to the Law on Small and Medium-Sized Business Development, which entered into force in the summer of this year, social business status is granted when an enterprise, which is an SME, allocates and uses more than 50% of its profits to create social or environmental impact. In addition, the enterprise must engage in regular economic activity and be independent of state and municipal authorities and bodies and other public legal entities.
The EIMIN description sets out the procedures for obtaining and losing the status of a social business operator, the share of profits used to generate social or environmental impact, the methodology for measuring social and environmental impact, the requirements for the independence of a social business operator, and the forms of incentives for social business.
Social business status is obtained by registering on the Innovation Agency’s Social Business Platform, where registered users can fill in a self-declaration form. Once this status has been achieved, the user receives a certificate of social business status and their social business profile is added to the publicly accessible register of social businesses.
“Social business status is granted for an indefinite period of time, but once a business has achieved this status, after one year it must submit reports, which are published on the Social Business Platform. This allows citizens to see the social or environmental impact and progress of social businesses. This is useful both for the social businesses themselves, as it shows their contribution to solving pressing societal problems, and for the people who care about such problems”, said Ieva Valeškaitė, Vice-Minister of the Economy and Innovation.
The description of the procedures for obtaining and losing the status of a social business operator is based on an amendment to the Law on Small and Medium-Sized Business Development, which introduced a definition of social business into this law.
The description prepared by the Ministry of the Economy and Innovation is available here.
Last updated: 08-11-2024
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