The purpose of a benefit corporation is to create general public benefit, which is defined as a material positive impact on society and the environment.
In a traditional corporation the officers and directors are required to consider the impact of their decisions on the profits of the company for the benefit of the shareholders. Officers and directors are bound by this fiduciary duty and often times must maximize the benefit to the shareholder over third-party interests.
In a benefit corporation the officers and directors are also required to consider how their decisions will impact not only shareholders but also society and the environment.
The officers and directors of a benefit corporation have more freedom to make decisions that will better the world around them, and not just strictly create profit for the Corporation.
How to Form a B Corp
A B-Corp differs from a C or S Corp in purpose, accountability, and transparency but not in the way it is taxed.
Formation of a B Corp can vary from State to State and careful attention should be paid to the bylaws of the corporation. You should consult with an experienced business attorney who can guide you.
What is a certified B– Corporation
Certified B Corporations are social enterprises verified by B Lab, a nonprofit organization.
This is a private labeling requirement which a company can chose to apply for or not. A company can be registered as a Benefit Corporation with their Secretary of State but not be registered with B Lab.
To obtain certification applicants must meet certain performance requirements showing that the company provides a benefit, pay an annual fee and re-certify after a number of years.
Certification allows the company to use the official “Certified B Corp” logo.
Is a B Corp right for me?
Whether a B Corp is right for you is an individual choice that should be made after consulting with an experienced attorney.
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