Benefit Corp vs. Certified B Corp

Benefit corporations and Certified B Corporations are often, and understandably, confused.  Both are sometimes called B Corps by mistake or as shorthand.  They share much in common and have a few important differences.

Quick snapshot:

Certified B Corporation is a certification conferred by the nonprofit B Lab.  Benefit corporation is a legal status administered by the state.  Benefit corporations do NOT need to be certified.

Certified B Corporations have been certified as having met a high standard of overall social and environmental performance, and as a result have access to a portfolio of services and support that benefit corporations do not.

What are the commonalities between benefit corporations and Certified B Corporations?

  • Accountability: Directors of both are required to consider the effect of decisions not only on shareholders, but also on other stakeholders, such as workers, community, and the environment.
  • Transparency: Both are required to publish publically a report  assessing their overall social and environmental performance against a third party standard.
  • B Lab: B Lab is the nonprofit organization that helped to develop the benefit corporation Model Legislation and works with the community of Certified B Corporations and others to marshal support for its passage.  B Lab is also the nonprofit organization that certifies and supports Certified B Corporations. 

What are the differences between benefit corporations and Certified B Corporations?

  • Performance: Each Certified B Corporation has achieved a verified minimum score on the B Impact Asessment (80 points out 200 needed).  While benefit corporations are required to publish an annual report assessing their overall social and environmental performance against a third party standard, that report is not required to be verified, certified, or audited by a third party standard organization. 
  • Support: Certified B Corporations have access to a portfolio of services and support from B Lab to help them with marketing,  sales, raising money, saving money, learning from and doing business within the community of Certified B Corps.   
  • Availability:  Benefit corporation is a corporate status legally recognized by 26 states and the District of Columbia.  Certified B Corporation is a certification available to businesses in all 50 states and around the world.  As of 1/1/14 there are over 1050 Certified B Corps in 60 different industires.

 

This site is run as a public service by B Lab, a nonprofit whose mission is to use the power of business to solve social and environmental problems. 
For information on B Lab's other initiatives, please visit www.bcorporation.net.

Legal Disclaimer: The information on this site does not constitute legal advice and is provided solely as a reference.  Those interested in electing benefit corporation status should discuss with their legal advisors the potential risks and liabilities and specific processes associated with this for the company's circumstances and state of incorporation.