What is a B Corporation and is it right for your business?

Written by: Andrew Gale - Orange County - Small Business Attorney

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.

 

 


Andrew Gale – Incorporation Attorney

Attorney at Law Offices 1820 West Orangewood Avenue, Suite 104a, Orange, CA 92868 Office: +1 (714) 634-4838. I provide legal advice, counseling and related services to entrepreneurs including the formation and management of their corporations and estate plans.

My Law Office is based in Orange County California and I have practiced law for 30 years. I have given advice to more than 1000 small business owners on the best ways to set up a company, what types of business entities (corporations, limited liability companies, partnerships) are best suited for them and their small business, how to legally run the business to protect their assets and how to successfully transfer the business to family or key employees through the proper use of estate planning and trusts.