What Is a Benefits Corporation?

A Benefits Corporation is a legal entity that is set up to provide a public benefit.

The company using this entity must commit to producing a public benefit.

The board of directors must consider the consequences of its decisions on the community.

The company must provide a report on its social and environmental performance.

The standard is the Delaware Public Benefits Corporation or PBC.

A B-corp is similar but distinct from a Benefits Corporation.

A B-corp is certified by B Labs for meeting social and environmental standards for performance, accountability, and transparency.

The company’s impact is measured with an assessment tool by B Labs.

The intention is to encourage the directors of a company to consider the interests of the broader community.

Those pursuing a B-corp must amend their operating agreement.

There’s an annual fee based on revenue for the company to maintain a certification.

Startups providing a social or environmental impact may want to adopt a Benefits entity or B-Corp designation.

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