Low profit organization

from Wikipedia, the free encyclopedia

Low-profit organizations (LPO) are privately owned organizations or companies that primarily pursue objective objectives . Secondly, they can generate moderate profits and - in contrast to non-profit organizations (NPO) - distribute them to the owners, e.g. B. as a dividend . LPO position themselves between NPO and profit-oriented companies ( corporations ).

legal form

The term LPO serves as an umbrella term and, like NPO, does not itself designate a (separate) legal form. An example of an existing legal form is the low-profit limited liability company (L3C) in the USA. In German-speaking countries, cooperatives can be run as LPOs and pay a moderate dividend to the members (owners) at their own discretion. The GLS Gemeinschaftbank eG can serve as an example , where the members receive a dividend of 2% per year for their GLS Bank shares (2017).

Corporate purpose

In the case of an LPO, the focus is on the company's purpose , which is laid down in the articles of association (statutes). Objectives have priority over financial objectives such as sales, profit and return (dominance of objectives). The terms social entrepreneurship and corporate social responsibility (CSR) aim in the same direction, but are not necessarily associated with low-profit. An LPO should anchor CSR in the business model and create a sustainability report. It can also be non-profit and z. B. provide merit goods and services.

financing

An LPO raises equity and debt to fund low-profit investments . The equity is provided by the owners. For the owners, the actual corporate purpose is in the foreground. Therefore, they are in principle ready to provide equity capital at low cost . This is e.g. This is the case, for example, when a company only makes low profits and as a result the owners accept a low profit distribution (dividend).

A debt financing at arm's length rather not come into question. An LPO operates on a low-profit basis and is therefore dependent on interest-free or low-interest development loans. These can be normal bank loans that are subsidized by the state in order to reduce interest costs. The granting of promotional loans must be linked to a sustainability report in order to ensure that strict social and ecological standards are adhered to, which are based on national and international guidelines and norms. These include the Sustainable Development Goals (SDG), the UN Global Compact and ISO 26000 .

swell

  1. ^ Jäggi, André: Social Firms as Low-Profit Enterprises? In: Stefan M. Adam (ed.): The social company - work economically and act socially, contributions to a socio-economic innovation . 2nd Edition. Haupt Verlag, Bern 2012, p. 16-40 .
  2. ^ Field, Anne: IRS Rule Could Help the Fledgling L3C Corporate Form . Forbes, September 2012.
  3. ^ Witkin, Jim: The L3C: A More Creative Capitalism. January 2009, accessed June 3, 2019 .
  4. ↑ Luttmer, Nina: GLS Bank Sustainable investing is en vogue. In: Frankfurter Rundschau. Retrieved January 28, 2015 .
  5. ↑ GLS online editors: Banking: Where does the dividend come from? In: The GLS BANK blog. November 6, 2015, accessed July 17, 2017 .
  6. ↑ Jäggi, André: Doing good with entrepreneurial means: Low-profit companies maximize benefits for many instead of profit for a few . Point in time 96, Solothurn / Switzerland 2008.
  7. ↑ Fahrbach, Christian: Low-profit investments - assess, finance, promote . Lit-Verlag, Münster, Vienna 2014.
  8. ^ Fahrbach, Christian: Low-Profit - Reconciling Economy with Ecology . Momentum 16, Hallstatt / Austria 2016.