Benefit corporations are for-profit companies that want to consider additional stakeholders in addition to making a profit for their shareholders. They are not non-profits, hybrids, or charities. Non-profits may not become benefit corporations unless they switch to a for-profit structure.
Benefit corporations must use a freely-chosen credible, comprehensive, independent and transparent third party standard to create their benefit report, but they do not need to be certified or audited by that third party standard. Benefit corporations may choose to be certified by a third party standard as a best practice and as a means to attract capital, but there is no requirement to do so. Learn more about benefit corporation reporting requirements.
The B Impact Assessment, which is used to administer the B Corporation certification, is one third-party standard that a benefit corporation may choose from when developing their benefit report. However, there is no requirement for a benefit corporation to complete B Corporation certification, just as there is no requirement for a benefit corporation to receive any certification.
The community of benefit corporations includes well-known and highly-profitable companies such as Patagonia, Method, and Klean Kanteen. These companies are not only profitable, but leaders in their industries who show how the benefit corporation structure can be used to generate long-term value. While benefit corporations have the freedom to consider other factors alongside profit and may choose to value those other factors above short-term profit maximization, they are not anti-profit.
Any size company can incorporate or re-incorporate as a benefit corporation. Over 1,200 companies have incorporated nationally as benefit corporations, most in the last few years and all since October 2010. Some well-known benefit corporations include Patagonia, Method, Plum Organics, and King Arthur Flour.
The annual benefit report should not pose undue obstacles for managers. In fact, many managers find the process a useful tool with which they can improve their impact and their business operations. In addition, producing an annual benefit report can be a press and marketing opportunity for companies. The annual benefit report required in most states is a self-assessment using a third-party standard conducted by the benefit corporation. There is no requirement to be certified or audited by this third party standard. B Lab’s B Impact Assessment is one of several standards that meets the requirements of the benefit corporation statute and is available for free.