Over the last decade, businesses, consumers and employees around the world have demanded more focus on the triple bottom line of people, planet, and profit. These shifting expectations have led to the development of benefit companies. A benefit corporation is a for-profit company formed to both (1) generate profits for its equity owners; and (2) support a greater social or environmental benefit.
Benefit Corporation v. Certified B Corporations
These two terms are often referred to as “B Corps”, but they do have important different meanings:
- A benefit corporation is a legal entity structure formed pursuant to a state statute. Once a business follows the statutory requirements, it can be a benefit corporation or benefit limited liability company, if the relevant state has a benefit LLC structure available. Benefit corporation status allows a company to opt out of “shareholder primacy” and opt into governance that takes into account stakeholders who are materially affected by the company’s decision-making, for example, workers, customers, local communities, wider society and the environment.
- A Certified B Corporation has been rigorously vetted and certified by B Lab based on the business’s social and environmental performance, accountability, and transparency. B Lab “began in 2006 with the idea that a different kind of economy was not only possible, but necessary — and that business could lead the way towards a new, stakeholder-driven model.” Once certified, the business has access to B Lab’s network and use of its certification logo. Certified B Corporations drive business as a force for good.
Interested in being a Benefit Corp? We did it and can help you too.
