Identify Social Enterprises

Social enterprises have become an inevitable trend of future social development. At present, the development of Chinese social enterprises faces internal and external adversities, and the prospects of the development of social enterprises are not clear. In order to build a good environment for the development of domestic social enterprises, this article fully draws on international experience and combines with China’s actual conditions, and evaluates the existing standards of certification for civil society enterprises in China from five dimensions: organizational goals, income sources, profit distribution, asset disposal, and profit distribution. On this basis, further proposals are proposed to improve public awareness of social enterprises and lay a practical foundation for future legislative work.

ties and have weak profitability. Business enterprises with the nature of social enterprises must also take into account the social mission and profitability goals, compared to other market economic entities, and their competitiveness is weak.
These reasons have caused certain obstacles to the financial sustainability of social enterprises. Whether it is its low public awareness or weak financial sustainability, it is largely due to the lack of policies and legal support for social enterprises. The organizational form of social enterprises is inconsistent with the current legal system. The identity of social enterprises has been questioned by the public, and their orientation is limited to first-tier cities. This has led to problems in the regulatory legitimacy, moral legitimacy, and cognitive legitimacy, and further affected economic benefits and social benefits of social enterprises [1].
The current development of social enterprises in China lacks policies and legal support, and the government's attitude towards social enterprises is not clear [2].
Some scholars regard social enterprises as a combination of public policies, markets, and civil society, and believe that social enterprises will become an important force for future economic development, and may even be the true growth force of developed economies in the post-capitalist era, so social enterprise legislation is an inevitable trend. Combining with the legislative experience of China's social organizations, the legislative work of social enterprises is not so simple. It requires a long observation period. In the case that the legal form cannot correspond to the social enterprise, it is necessary for the civil society to formulate social enterprise standards and carry out certification [3]. Therefore, it has strong feasibility that social organizations with higher authority and authority formulate social enterprise certification standards and give social enterprises legal status to promote development.
China's civil social enterprise certification work has started. "Shunde District Social Enterprise Cultivation and Incubation Support Plan" and "China Charity Exhibition Social Enterprise Authentication Method" are both standards established by civil organizations for the identification of social enterprises. However, as an explorer, the domestic social enterprise certification standards still have certain flaws. Therefore, it is necessary to comment on the domestic certification standards and find out its shortcomings. Based on the experience of foreign countries, we propose suggestions for improvement in light of China's actual J. Wang situation, promoting the standardized development of social enterprises from the bottom up, and enable the public to better identify social enterprises. At the same time, it also lays a foundation for future legislation. Considering this, this paper will build an analytical framework from the five dimensions: organizational goals, income sources, profit distribution, asset disposal, and governance structure based on past scholars' research to measure the existing certification standards for civil society enterprises in China, to provide reference for the formulation of relevant laws of the state social enterprise. The Shunde District Social Enterprise Cultivation and Incubation Support Plan was launched in September 2014 by the Social Innovation Center of Shunde District and is the first domestic social enterprise standard for the purpose of social enterprise certification, "Accelerate by Evaluation". In 2015, it took the lead in launching the social enterprise certification in China. The review mainly in-J. Wang American Journal of Industrial and Business Management cluded two links: field visits and comprehensive review. The social goals, social benefits, business models, economic benefits, management structure, democratic participation, and profit distribution of social enterprises were targeted for comprehensive considerations in many aspects. The first social enterprise certification identified a total of 3 social enterprises and 6 quasi-social enterprises.

The Exploration of China's Social Enterprise Certification Standards
The scope of business is concentrated in the field of disability. In 2016, according to the practical situation and opinions of all parties, the Social Innovation Center released the "Supporting Plan for Social Enterprise Cultivation and Incubation in Shunde (Revised Edition)", and launched the second social enterprise certification work in the same year to conduct hierarchical certification for participating social enterprises. It is divided into A grade, AA grade, AAA grade.
In September 2015, China Charity Exchange Exhibition released the "China Charity Exchange Exhibition Social Enterprise Certification Procedure (Trial)" (hereinafter referred to as the "CCF certification"). This certification method was developed by the China Charity Exchange Exhibition Development Center in Shenzhen, the Peking University Civil Society Research Center, and the Chinese public welfare research. The unofficial certification jointly initiated and supported by the Institute, the Social Enterprise Research Center, and the Southern Capital Foundation has opened the first national social enterprise certification. The CCF defines the social enterprise as a business means and a social organization that aims to establish a purpose and a goal for the sustainable resolution of specific social issues. According to its definition of a social enterprise, an institution that applies for social enterprise certification needs to meet five basic conditions, including organizational goals, sources of income, profit distribution, staff structure, and registration information. After two certifications in 2015 and 2016, a total of 23 organizations have obtained social corporate identities, of which the second certification has adopted the method of hierarchical certification for the first time. According to the latest news, the 2017 CCF certification standards will be further improved, involving the adoption of different certification standards and procedures for social organizations and enterprise applicant organizations, lowering the threshold for certification, and prioritizing the social goals in the governance structure, solving social issues in a creative way, follow-up service support, etc.
The first social enterprise awards ceremony sponsored by China Social Enterprise and Social Investment Forum was held in Beijing on June 12, 2017. The Social Enterprise Award is aimed at "discovering outstanding representatives of Chinese social enterprises, looking for companies that focus on social pain points, and setting a benchmark for the social enterprise industry". The purpose is to recognize and encourage innovative solutions to major social issues facing China in a large-scale and systematic way. The selection criteria are divided into six major systems, including social mission, social influence, business model, innovation, core team resources, and sustainability. There are 19 secondary indicators. To some extent, this is also considered a social enterprise certification.

The Successful Experience of Foreign Social Enterprise Certification
In recent years, with the rapid rise of social enterprises in the global context, the legislative work of various countries on social enterprises is gradually being carried out. In the process of continuously exploring legal theory, some countries have made remarkable achievements.
The United Kingdom, Italy, Finland, Latvia, Lithuania, Poland, South Korea, and the United States introduced laws to create new legal forms or to identify social enterprises [3]. Italy is the first country in the world to carry out social enterprise legislation. It is believed that institutions can be recognized as social enterprises if they meet the principle of "do not distributive profits", and at the

1) Yunus's Standard
Muhammad Yunus is a pioneer of social enterprises. The success of microfinance is by no means accidental. It is the outward appearance of insight into the nature of society and its profound knowledge. According to his own exploration of social enterprise theory and practice, Muhammad Yunus proposed a set of standards for social enterprise recognition.
• Enterprises must serve social goals rather than profit maximization; • Financial sustainability; • The investor does not pay dividends after recovering the initial investment; • The investor's profit after recovering the initial investment is used to expand the scale of the company or improve product services; • Environmental awareness; • Employees receive market pay and enjoy a better working environment than

Economic/entrepreneurial indicators:
• Providing continuous behavior of products and services; • There is a considerable degree of economic risk; • Work that needs to be paid should be reduced as much as possible.

Social indicators:
• Clear purpose of serving the community; • Be initiated by a group of citizens or civil society groups; • Limited profit distribution.

Governance indicators:
• High degree of autonomy; • Capital ownership has nothing to do with business decision-making authority; • The nature of participation, participation of all parties affected by the organization in institutional governance.
According to the EMES European Research Network's definition of social enterprise recognition standards, the two focuses of social enterprises are the characteristics of multi-participation and the nature of multiple objectives. Specifically, its economic goals are mainly reflected in the requirement for institutionalized corporate operations, economic risks, and cost reduction; social goals are J. Wang manifested in terms of institutional sponsors, service targets, and profit orientation; governance emphasizes institutional autonomy and democratic decision-making and participating subject. EMES starts with the goals of social enterprises and the characteristics of governance, and conducts a comprehensive assessment of social enterprises. At the same time, it needs to be pointed out that the above indicators do not constitute the standards of social enterprise norms, but that scholars provide an "ideal model" for social enterprise positioning. It is more like a tool to help researchers to better define the organizational category of social enterprises.
EMES is intended to give a benchmarking to measure and distinguish different types of social enterprises, rather than only if all the standards are met, can an institution be called a social enterprise [4].

3) SEM certification standards in the United Kingdom
The United Kingdom is a leader in social enterprises worldwide. In the United Kingdom, social enterprises do not have a legal form that fully corresponds to them. Social enterprises cannot be identified through registration types. However, the social enterprise industry has its own certification standards. At present, the authoritative is a social enterprise certification conducted by the British Social Enterprise Signing Company (SEM). There are six specific certification standards.
• Institutions can clearly reflect social and environmental goals; • An independent organization; • At least 50% of the revenue comes from market-based transactions; • At least 50% of profits are applied to social and environmental goals; • The remaining assets of the institution should be used for social and environmental purposes; • Can provide evidence that the organization is achieving social/environmental goals.
The SEM certification standards recognize the goals of social enterprises, sources of income, profit distribution, and asset locking. For enterprises within one year of business activities, they only need to meet the criteria of one, two, four, but within 18 months of receiving the social enterprise logo certification, they must achieve the third standard, otherwise the certification license will be cancelled. In 2014, it also launched the Gold Social Enterprise Certification, focusing on governance, business ethics, and fiscal transparency. Although SEM certification is not an official behavior of the government, its certification standards are worthy of reference by Chinese social enterprises. In 2016, the "China-UK Social Enterprise Certification Standards Workshop" was held in Beijing to introduce and learn from the construction methods and practical experience of international social enterprise certification systems such as British social enterprise logos, so as to localize social enterprise certification standards and promote the ecological environment construction of Chinese social enterprises.

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The United States Co-Benefit Lab (B-Lab) is initiating a global commercial campaign. Establishing a certification system for B Corp (Chinese scholars call it a "B-type enterprise") by using a set of very charitable standards to certify a batch of commercial enterprises. It integrates business with public welfare and creates economic, social and environmental values. Its certification content mainly includes environmental responsibility, employee treatment, customer satisfaction, community influence and transparency.
At present, more than 2000 companies in 130 industries in more than 50 countries have obtained B-Corp certification. China's "first response" is to obtain B-Corp certified companies. Jay Coen Gilbert, co-founder of B-Lab, once said that entrepreneurs and investors need a set of standards to separate companies that practice higher levels of social responsibility from companies that shout marketing slogans. From this we can see that B-Corp authentication essentially uses commercial companies as the authentication object and does not include non-profit organizations. However, its emphasis on social environmental performance, employee benefits and work environment can also provide reference for the certification of commercial enterprises in Chinese social enterprise certification.
The above four types of standards are more influential civil society enterprise certification standards in the world. Each type of standard includes the understanding of the connotation and extension of social enterprises by various agencies and the uniqueness of local social enterprise practice. Due to the differences in the historical traditions and social realities of different regions and countries, there are some differences in the standards for their identification. It should be particularly pointed out that the B-Corp certification in the United States does not make special provisions on income sources and profit distribution. This may be due to the fact that its target is mainly commercial enterprises, and it also reflects the different positioning of social enterprises in different countries and regions. The United States is biased toward a "market economy", while Britain and the EU are more inclined to a "social economy". However, in general, most certification standards include dimensions such as social goals, financial sustainability, profit distribution, and governance structure. Wang Shiqiang also believes that national social enterprise identification standards include the five dimensions of social mission, income sources, profit distribution, asset disposal, and governance structure. China's social enterprises can also be identified accordingly [3]. The formulation of social enterprise certification standards is the most recent international development trend [4]. Both domestic and foreign countries are actively practicing and exploring. The experience of foreign social enterprise certification provides precious reference resources for China's social enterprise certification.

Insufficiency of Chinese Social Enterprise Certification
Standards American Journal of Industrial and Business Management social enterprise certification standard. To form such a set of standards, we must comprehensively consider various influencing factors to better grasp the connotation and attributes of social enterprises. As far as China's current civil society enterprise certification standards are concerned, there are still some deficiencies.
Based on the research of many scholars, this article will also analyze existing certification standards from five dimensions: organizational goals, income sources, profit distribution, asset disposal, and governance structure.
The first is the organizational goal. Social enterprises are organizations with dual attributes that achieve social goals through enterprise operations. In terms of its connotation, it should roughly have four characteristics: first, it should be active in the social field; second, it should be devoted to social innovation; third, it should be aimed at realizing social benefits; and fourth, it must be regulated by relevant specific laws [5]. Therefore, the goal of social enterprises is to solve so- attributes. Its economic nature is also the basis for the survival of social organizations. Therefore, the source of income is still quantified as far as possible. It is also worth noting that the social enterprise certification standards at home and abroad do not stipulate the income and expenditure situation of social enterprises, that is, whether they can participate in social enterprise identification only when the enterprise receives more than support and is in a profitable state.

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This is an independent survival of social enterprises. The consideration of competence relates to the future development of social enterprises.
The third is the distribution of profits. Social enterprise is not to obtain economic income, and income is only a means to achieve its social goals, to avoid pursuing the maximization of individual or shareholder interests, but to use profits for the realization of social goals or the development of social enterprises.
At the same time, we must understand that only profitable social enterprises can continuously achieve their social goals. Social enterprises are not the same as The fourth is asset disposal. The requirement of "asset locking" is essentially to ensure the social "motivation" of social enterprises. Countries generally provide for the use of surplus assets for social or environmental purposes after the cancellation of social enterprises. Institutional founders cannot privatize assets.
However, some countries allow a certain percentage of assets to be allocated or freely disposed of. The Shunde Social Innovation Center accreditation standards allow the AA social enterprises to allocate no more than 50% of their assets.
AAA social enterprises require all the remaining assets to be donated to social enterprises, public welfare funds or other public welfare social organizations.
The China Charity Exchange Exhibition did not regulate the disposal of assets.
Because its certification target is a commercial enterprise or social organization, and according to the "Provisional Regulations for the Registration of Civil Non-enterprise Units", the authority to dispose of surplus assets after the cancellation of the social organization is delivered to the competent business unit, which is usually authorized by a government agency or government. Considering that the development of China's public welfare undertakings is in its infancy,

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it is necessary to actively guide the development of social enterprises in the direction of public welfare, and we must adhere to the public welfare nature, and the surplus assets should not be distributed.
The fifth is governance structure. Broadly speaking, governance structure refers to a series of organizational settings that ensure the achievement of institu- However, in order to achieve a better social mission, democratic decision-making and the participation of multiple stakeholders in social enterprise operations are indispensable.

Improve China's Civil Society Enterprise Certification Standards
In the process of development, social enterprises gradually formed a unique dif- Combining the above analysis of domestic social enterprise recognition standards, we still proceed from the five dimensions of organizational goals, income sources, profit distribution, asset disposal, and governance structure to further improve civil society enterprise certification standards in an effort to promote an open and inclusive society, the formation of corporate ecosystem.

1) Organizational goals
According to Wang Ming, Zhu Xiaohong [5], defining the connotation of social enterprises, social enterprises refer to enterprises that are active in certain social fields, committed to innovation, and achieve social benefits. Service areas, social innovation, and social benefits are important indicators for measuring social enterprises. This article will also measure the organizational goals of social enterprises from these three aspects. Of course, the core is the realization of social benefits.
The first is service area. At present, social issues are complex and diverse, and involve a wide range of fields. Social enterprises must understand. It defines the service areas of the organization and the specific social issues to be solved, and it is set out in the organization charter. Social goals can be poverty alleviation, disability, employment promotion, education, medical care, environmental protection, etc. There is no excessive restriction on the scope of services provided by social enterprises, as long as they are carried out to promote social development and progress. Social enterprises must not produce negative external effects of the ecological environment in the process of achieving social goals. At the same time, they must also pay attention to employee benefits and create a good working environment for employees.
The secondly is social innovation. Some scholars believe that the biggest feature of social enterprises is innovation. The body is the product of social entrepreneurs who solve social problems with innovative spirit. In the course of business development, social enterprises must embody their own spirit of innovation, which can be the innovation of ideas, or the innovation of methods, modes, or means. Because social enterprises must simultaneously take into account economic and social goals, they must continue to innovate in order to have more American Journal of Industrial and Business Management advantages in the market competition than ordinary commercial enterprises in order to gain a foothold in the market. The criterion for measuring its innovation is to provide a social enterprise development plan and determine whether it is innovative through the review of social enterprise development plans.
The third is social benefits. The realization of social benefits is the ultimate goal of social enterprises and also their social mission. The organization applying for certification must submit an annual summary, and the assessment report on the influence of social enterprises provided by third parties should also be used as evidence for measuring the social benefits of social enterprises.

2) Sources of income
The way in which social enterprises earn income is not unique.

3) Profit Distribution
All along, "whether or not to distribute dividends" has been a hot topic that has caused controversy. However, as we analyzed above, the development of social enterprises requires a certain degree of profit distribution to guide civil capital inflows, as long as they grasp the distribution ratio. One of the major inter- A company must have the ability to survive independently, that is, profitability, in order to be certified as a social enterprise. This is the most basic requirement.
So here is a two-year period as a measure of the standard, that is, companies must continue to profit for two years before they can apply for certification as a social enterprise. As for the proportion of profit distribution, different levels of social enterprises can enjoy different proportions of profit distribution. Based on the standards of some countries in Hong Kong and Europe, this paper believes that primary social enterprises can distribute no more than 50% of profits, medium-sized social enterprises do not exceed 35% of profits, and senior social enterprises do not exceed 20%. Different levels of social enterprises have great differences in their own development ability, access to resources, and social capital stock. The lower the level of social enterprise is, the more need the financial support, and correspondingly it can be allowed to allocate a higher proportion of profits. At the same time, social enterprises must provide annual financial reports for the past two years in order to measure their financial status; allow the certification body to put financial reports on the official website for monitoring by all parties to reflect its financial transparency.

4) Asset Disposal
Unlike ordinary enterprises, donors and investors of social enterprises do not become "owners" of social enterprises (i.e., resource providers do not enjoy property ownership) after the occurrence of donation activities and investment activities, nor can they perform the remaining assets of the enterprise; request and control. The remaining property after termination cannot be recovered by J. Wang American Journal of Industrial and Business Management the funder and can only be transferred to other public sectors (government or other non-profit organization). This article also advocates the principle of "asset locking", that is, surplus assets are not allocated to better ensure the social motivation of social enterprises.

5) Governance structure
Applying a metaphor in the business world, "Corporate governance structure is the nervous system of an enterprise". It can be seen that the governance structure is important to a business. It is not only the structural arrangement of the organization, but also an indispensable factor in the development of the organization's operations. For social enterprises, their governance structure needs to reflect at least three points: the participation of multiple stakeholders, democratic decision-making, and independent autonomy.
First, the participation of multiple stakeholders. The composition of the board of directors of social enterprises must reflect multiple stakeholders. This is an effective way to realize the public interests of the society and prevent certain minority interest groups from mastering the business decision-making power. Stakeholders vary according to the area of activity of social enterprises, but employees and beneficiary groups must be taken into account.
Second, democratic decision-making. The EMES standard proposes a democratic decision-making method where "capital ownership has nothing to do with business decision-making power". Democratic decision-making is that the members of the organization share the decision-making power, that is, the "one person, one vote" principle. The capital owner and other stakeholders make decisions together so that the decision-making process respects the opinions of each decision-maker.
Third, independent autonomy. Social enterprises must be independent of government agencies or charitable foundations to achieve institutional autonomy. By means of self-government, the healthy operation of the organization is realized.

Conclusion
The purpose of this paper is to form a more comprehensive and widely accepted social enterprise certification standard. On the basis of exploring the international social enterprise certification standards, and the analysis of the insufficiency of China's social enterprise certification standards, we further put forward suggestions for improvement and measures. Through this article we know that the development of social enterprises in China is not yet mature compared with Western countries. In order to further promote the development of social enterprises in China, we need to improve organizational goals, income sources, profit distribution, asset disposal, and governance structures. Social innovation and social benefits are important indicators for measuring social enterprises.