B-Corps Gaining Popularity

Benefit corporations (also known as B Corps) are a different kind of corporation. While most companies focus on putting profits first, B Corps are required to create benefits for society as well as shareholders. Benefit corporations differ from a traditional corporation in regards to their purpose, accountability and transparency. 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. A benefit corporation’s directors operate the business with the same authority as in a traditional corporation, but the additional accountability provisions found in a benefit corporation require the director and officers to consider the impact of their decisions not only on shareholders but also on society and the environment.

Last week, Nevada Governor Brian Sandoval signed a Benefit Corporation bill AB 89 into law. This makes Nevada the 16th state to pass B Corp legislation. Other states with B Corp Legislation include Illinois, Pennsylvania, Arkansas, Virginia and Louisiana. Several other states are currently considering adding the B Corp legislation. Ohio is not currently among them, but things may changes as the B Corp gains popularity with entrepreneurs and investors.

According to a White Paper from a group of corporate attorneys, the benefit corporation is the corporate structure that best meets the needs of the growing number of entrepreneurs and investors who seek to use business as a tool to solve social and environmental problems.Benefit corporations are exactly the same as traditional corporations except for three little things that make them game-changers: higher standards of purpose, accountability, and transparency. Benefit corporation laws have been enacted in 11 states and are moving forward in 16 others. Legislation has enjoyed overwhelming bi-partisan support — including 12 unanimous votes — because the legislation is 100% voluntary and costs states nothing.Please visit benefitcorp.net to find resources for businesses and attorneys interested in learning more.

The ABC’s of B-Corp - Webinar - June 19
Join us June 19, 12:00 pm EDT for an informative webinar with Erik Trojian of B-Lab and Ashley Orgain from Seventh Generation to discuss Benefit Corporations.