State aid for rural development in the European Union

State aid is inadmissible in accordance with Article 107 (1) of the Treaty on the Functioning of the European Union. However, from the general prohibition of state aid, there are exceptions, contained in the Treaty on the Functioning of the EU and acts of secondary legislation of the Union. The paper analyzes the provisions contained in the EU Guidelines on state aid in the agriculture and forestry for rural areas for the period 2014-2020, with an emphasis on state aid for rural development in the European Union, as well as the possibilities of encouraging social entrepreneurship in rural areas. The study included the current practice of the European Commission in this area. Practice has shown that the European Commission approved state aid for this purpose. Social entrepreneurship in the function of maximizing social values and state aid to the most vulnerable groups of society can lay the foundations of rural development in the long run. In the European Union, the concept of social entrepreneurship is present in the contemporary form since the 1980s, while the process of expanding this form of entrepreneurship is under way in the Republic of Serbia. In this paper the author governed by the two methods: positive legal method, as well as legal and logical method of induction and deduction.