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In: Benefit Corporation

Deciding the best legal structure for a social enterprise can seem like a daunting, high-stakes task. 

This post is designed to help social entrepreneurs and their attorney progress through a clear process for understanding how to structure their organization to maximize their social / environmental impact. I’ve developed and refined this method by working with hundreds of social entrepreneurs, getting input from fellow attorneys in the field, research and teaching the topic since 2008. Though this decision is never simple, the goal of this process is to reduce complexity, confusion and give the social entrepreneur a few clear options.

Progressing through the process will help narrow down the potential legal structures from 7 to 2 or 3. (more…)

If you have an existing company, you can elect to become a benefit corporation by amending your governing documents. In most states, amendment requires a 66% super-majority vote of all shareholders. This high threshold of approval is an important element of the B Corp structure.

Converting from a traditional corporation or LLC to a B Corp changes the goals of the company and thereby alters the relationship between the shareholders and the social entrepreneur. Under a B Corp, the mandate of the company shifts from a narrow focus on pure profit maximization to a broader focus of creating a positive impact on people and planet while still making a profit.

At times the pursuit of a social / environmental impact can have a negative impact on profitability, which can create tension between the shareholder and social entrepreneur. Under a traditional corporation, the investor has the right to sue the entrepreneur if her decisions to create a social / environmental impact has a negative financial impact. (more…)

The B Corp is a new type of corporation for a new type of entrepreneur, the social entrepreneur, who creates business models that benefit society, the environment, employees, customers and investors. These social entrepreneurs increasingly demand that business serve both shareholders and society, considering the impact of their decisions on multiple stakeholders rather than maintaining a singular focus on short-term maximization of financial profits.

B Corps are designed for companies that are intentionally seeking to create a material positive impact on society and the environment, in the operation of their business. If that purpose does not effect the manner in which you operate your company, then the B Corp may not be a good fit for you. (more…)

The B Corp is a new type of corporation for a new type of entrepreneur, the social entrepreneur, who creates business models that benefit society, the environment, employees, customers and investors. These social entrepreneurs increasingly demand that business serve both shareholders and society, considering the impact of their decisions on multiple stakeholders rather than maintaining a singular focus on short-term maximization of financial profits.

Whether your purpose is social or environmental… or both, it will likely have an impact on your financial bottom line. (more…)

If you are you running a tax-exempt organization, at either the federal or state level, or if you are seeking donations and/or grants to fund your operations, you are a non-profit.  The B Corp is a new class of for-profit corporation for companies that seek to blend profit and purpose. (more…)

Every social entrepreneur has their own unique dream of how they are going to change the world, striving to find a sweet spot where the needs of the world overlap with their skills and passion.

That being said, there is no one-size-fits-all approach to creating a positive impact. It will look different in every social enterprise. (more…)

A B Corp, or more properly a benefit corporation, is a new class of corporation for companies seeking to blend both profit and purpose.

The B Corp is a new type of corporation for a new type of entrepreneur, the social entrepreneur, who creates business models that benefit society, the environment, employees, customers and investors. These social entrepreneurs increasingly demand that business serve both shareholders and society, considering the impact of their decisions on multiple stakeholders rather than maintaining a singular focus on short-term maximization of financial profits. (more…)

The B Corp is distinct from a traditional corporation in two key ways.

First, the purpose of the company is much broader, shifting from a narrow pursuit of pure profit maximization to creating benefit for all stakeholders.

Secondly, B Corps have a higher standard of transparency and accountability regarding their social and environmental performance.

All B Corps are required to report their social and environmental performance through their annual benefit report. This annual benefit report is an opportunity for a B Corp to transparently share how they actually performed socially and environmentally with their stakeholders and the public. (more…)

August 2, 2016

What is a B Corp?

A B Corp or, in this case more properly called a benefit corporation, is a new class of corporation for companies seeking to blend both profit and purpose.

The B Corp is a new type of corporation for a new type of entrepreneur, the social entrepreneur, who creates business models that benefit society, the environment, employees, customers, and investors. These social entrepreneurs believe that business can serve both shareholders and society, considering the impact of their decisions on multiple stakeholders rather than maintaining a singular focus on short-term maximization of financial profits.

(more…)