"There's no downside to it. You're just aligning your intention, the philosophy of your business, from the very beginning, around a public good. That's something every company can do.”
Kickstarter CEO Yancey Strickler
“The greatest companies of our time … are founded and built by missionaries, not mercenaries. AltSchool is on a noble, sustainable mission to create long term social value.“
Kleiner Perkins and AltSchool investor John Doerr
“Benefit corporation legislation creates the legal framework to enable mission-driven companies like Patagonia to stay mission-driven"
- Patagonia founder Yvon Chouinard
“Method has always had investors who respected its mission, and the new corporate form won’t mean the company has to change the way it operates. "
- Method founder Adam Lowry
Plum Organics is the leading organic baby food brand and became a Delaware benefit corporation after being acquired by Campbell Soup Company.
Klean Kanteen created the first stainless steel drinking bottles and incorporated as a California benefit corporation in 2013.
What is a Benefit Corporation?
A new legal tool to create a solid foundation for long term mission alignment and value creation. It protects mission through capital raises and leadership changes, creates more flexibility when evaluating potential sale and liquidity options, and prepares businesses to lead a mission-driven life post-IPO.
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Benefit corporation status is a type of legal structure for businesses. It is not a certification, and it is available only in those states which have passed benefit corporation legislation. To become a benefit corporation, a company must incorporate as one in one of the states where it is available. Learn more about benefit corporation requirements.
To be a Certified B Corp, a company must meet high standards of performance, transparency, and accountability as set by the non-profit B Lab, including meeting a certain score on the B Impact Assessment, which measures a company’s impact on its workers, community, and environment. Companies of any size, structure, or location may be certified as B Corporations. Benefit corporations may choose to be certified as B Corporations as well, but there is no requirement to do so. Learn more about the differences between Certified B Corps and benefit corporations.
Benefit corporations are for-profit companies that want to consider additional stakeholders in addition to making a profit for their shareholders. They are not non-profits, hybrids, or charities. Non-profits may not become benefit corporations unless they switch to a for-profit structure.
Benefit corporations must use a freely-chosen credible, comprehensive, independent and transparent third party standard to create their benefit report, but they do not need to be certified or audited by that third party standard. Benefit corporations may choose to be certified by a third party standard as a best practice and as a means to attract capital, but there is no requirement to do so. Learn more about benefit corporation reporting requirements.
Any size company can incorporate or re-incorporate as a benefit corporation. Over 1,200 companies have incorporated nationally as benefit corporations, most in the last few years and all since October 2010. Some well-known benefit corporations include Patagonia, Method, Plum Organics, and King Arthur Flour.
Benefit corporations are attractive to a large and growing market for socially responsible and impact investments. Multiple benefit corporations including Ello, Dancing Deer Baking Co. and Cotopaxi have already raised capital both from social impact investors and from more traditional funds. There is over $3.7 Trillion in socially responsible investing assets under professional management today; the benefit corporation structure reduces due diligence time for those investors to find businesses that meet their investment goals.
Benefit corporation laws do not change or impact tax law in any way. A benefit corporation still must choose either C or S status like a traditional corporation, and are not taxed differently than other types of corporations.
By law, every benefit corporation must create a benefit report.
The B Impact Assessment is a free online tool that meets the legal requirements for benefit reporting. It's used by 30,000+ business to assess, compare, and improve their performance, and can generate a free benefit report based on a company's answers to questions about its impact on its workers, community, customers, and the environment.
For more detailed information about benefit corporationsview faq