The term social economy is often defined as the third sector of the economy in addition to two obvious – private and state – which includes numerous economic activities with an emphasized social orientation, which means they are not purely commercial (otherwise they would belong to the private sector) nor are they carried out under the auspices of the state (in that case, it would belong to the state sector). These activities are carried out at the municipal / local level, are voluntary and / or non-profit. It is therefore often said that the social economy includes three subsystems: local community, voluntary work and social enterprises. According to the widely used European Union classification, the social enterprise sector consists of: cooperatives, mutual benefit societies, associations and foundations.

Social enterprise is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. A social enterprise operates differently than a typical company because profit-maximization is not the primary reason for existing. It is managed in an open and responsible manner and, in particular, involves employees, consumers and stakeholders affected by its commercial activities.

Social enterprises operate in several specific areas, such as work integration – training and integration of people with disabilities and unemployed people, personal social services – health, well-being and medical care, professional training, education, health services, childcare services, services for elderly people, or aid for disadvantaged people, local development of disadvantaged areas – social enterprises in remote rural areas, neighborhood development/ rehabilitation schemes in urban areas, development aid and development cooperation with third countries, other – including recycling, environmental protection, sports, arts, culture or historical preservation, science, research and innovation, consumer protection and amateur sports.