What is a B Corporation and is it right for your business?
If you haven’t heard about Benefit Corporations or B Corps, you probably will soon. Powered by a non-profit organization known as B Lab, the movement is gaining popularity with companies that want to harness the power of their businesses to provide a public benefit.
In the current business climate, B Corps are becoming popular because of their focus on seeking to improve environmental and social ills, all while earning a profit like a more traditional corporation.
State governments are paying attention, too. Many now recognize B Corps, and legislation is pending in several other states. In states that don’t yet recognize B Corps, B Lab awards Certified Benefit Corporation (or Certified B Corp) status to applicants whose missions meet their standards.
How is a B Corp Different?
While B Corps are fairly new, they’re taxed in the same way as a traditional C or S corporation. What’s different is their mission. While B Corps, S corporations, and C corporations may seek to earn profits for shareholders, a Benefit Corporation also serves a public benefit, either social or environmental.
How to become B Corp or earn Certified Benefit Corporation status
In states recognizing B Corps, a company must submit articles of incorporation stating their mission to serve a public benefit. In all other states, organizations can earn Certified B Corp status from B Lab.
Is a B Corporation for you?
Small and medium-sized businesses might not see much value in having a B Corp. It requires additional paperwork and, because some states require B Corps to hire specialized personnel, it may prove to be too expensive. For other businesses, the distinction of serving a public benefit appeals to potential clients and helps them accomplish their goals to solve environmental and social ills, making it a perfect choice.
Still have questions? Learn more about Benefit Corporations and Certified Benefit Corporations.