Why Pass Benefit Corporation Legislation
32 states including the District of Columbia have passed benefit corporation legislation. 12 states have passed the bill completely unanimously, with 30 total unanimous floor votes. Benefit corporation legislation has enjoyed an almost 90% approval rating on all votes from legislators in both parties. How will passing benefit corporation legislation benefit your state?
More Freedom for Businesses
- Currently, entrepreneurs function under corporate law that dictates directors put profit over everything else. Benefit corporation legislation deregulates the purpose of a corporation, giving entrepreneurs the freedom to consider stakeholders in addition to profit. To learn more about the legal justification for benefit corporations click here.
- Benefit corporations make sense for all different types of business with different values, whether conservative or liberal.
- Electing benefit corp status is completely voluntary and has no impact on existing corporations, other corporate forms, taxes or government regulation.
- Shareholders enjoy all the same protections and permissions found in traditional corporate law, but also have more freedom and the ability to hold the company accountable to its stated mission. To learn more about shareholder protections click here.
No Cost to the State
- Passing benefit corporation legislation creates a no-cost economic development opportunity for states by creating new pathways for social entrepreneurs to scale and for impact investors to invest efficiently. To learn more about the investors investing in benefit corporations click here.
- No tax benefits are created, nor is there any impact on current tax law.
- Some states are already reporting revenue gains through the creation of benefit corporations.
Opportunity for Leadership
- Passing benefit corporation legislation helps facilitate a new market so that current shareholders, consumers and potential investors can make informed decisions based on companies’ missions and performance.
- Companies are leaving states that do not have benefit corporation status enacted and reincorporating in states that have benefit corporation laws.
- Compared to other new corporate forms model legislation helps distinguish between good and bad actors and thereby diminishes the chances of greenwashing.
- Benefit corporations help companies attract and retain talent. For example, Kickstarter PBC just announced that they've seen a 33% spike in visits to their jobs board webpage since announcing their switch to benefit corporation status.