With an alphabet soup of corporate structures available to U.S. businesses (think C-corp, S-corp, LLC, LLP, etc.) you might guess that creating another would be the last thing on the minds of new business owners. However, the success of socially mindful entrepreneurs and companies that boast both profit and positive social impact has increased interest in prioritizing social issues in addition to shareholder returns.
One recent incarnation of this concept is the benefit corporation. The term “benefit corporation” is a distinct type of legal entity and is not to be confused with the term “B-corp” which refers to a certification from the nonprofit “B Lab.” That certification is akin to Fair Trade certification as it imposes non-legal obligations that companies pledge to uphold in exchange for “B-corp” status awarded by B Lab. (more…)