Benefit Corporation VS: Certified B Corp
|What's the Difference?|
|Issue||Certified B Corporation||Benefit Corporation|
|Accountability||Directors required to consider impact on all stakeholders||Same|
|Transparency||Must publish public report of overall social and environmental performance assessed against a third party standard||Same*|
|Performance||Must achieve minimum verified score on B Impact Assessment||No objective minimum bar and no verification|
|Recertification required every two years against evolving standard||No ongoing verification or oversight|
|Availability||Available to every business regardless of corporate structure, state, or country of incorporation||Available for corporations only in 30 U.S. states and D.C.**|
|Cost||B Lab certification fees from $500 to $50,000/year, based on revenues||State filing fees from $70-$200|
|B Lab||Verifying body and supporting 501c3, offering access to portfolio of services and vibrant community of practice among B Corps||Developed Model Legislation, works for its passage and use, offers free reporting tool to meet transparency requirements; No role in oversight|
* Delaware benefit corps are not required to report publicly or against a third party standard
** Oregon and Maryland offer benefit LLC options
Heard the term “B Corp” and not sure what it means? B Corp refers to Certified B Corporations, but is sometimes confused with benefit corporations. So what’s the difference?
Certified B Corps and benefit corporations have a lot in common. They’re all for-profit businesses that have chosen to hold themselves to higher standards of accountability and transparency—in the case of benefit corporations, by including all stakeholders in their directors’ fiduciary duty and publishing an annual benefit report.
Certified B Corporation are for-profit entities that have been certified by a private non-profit called B Lab. They can include LLCs, corporations, partnerships, COOPs, ESOPs, etc. Benefit corporations, on the other hand, are for-profit corporations that have been publicly registered as such type of entity either by incorporating from the state or amending their articles and reincorporating as a benefit corporation.
Certified B Corps take the extra step of having their positive performance verified by B Lab using the B Impact Assessment (BIA), and must reach a threshold of 80 out of 200 points on the BIA to be eligible for certification. While many benefit corporations use the BIA as their third party standard for benefit reporting, they do not need to have their performance verified or audited, nor do they have to reach a particular score. Benefit corporations also do not have rights to the Certified B Corp intellectual property or the suite of services offered to B Corps by B Lab.
Many Certified B Corps are also benefit corporations, because incorporating as a benefit corporation is one way to fulfill the legal requirement of B Corp certification. However, while benefit corporation status is only available in 27 states and the District of Columbia, for-profit companies of any structure and in any location may pursue B Corp certification. All Certified B Corporations must expand the legal responsibilities of their corporation to take into consideration the interests of all stakeholders, not just shareholders, to the greatest extent possible within the laws of their state of incorporation and for their particular corporate structure.
To learn more about B Corp certification and its benefits, visit the B Corporation website.