A Progressive Form of Business Structure: the B Corporation
Doing Good While Doing Well
What if there were to be some sort of hybrid corporate structure that would couple profits with public benefits?
Sounds a bit fanciful, doesn’t it?
Well, there is such a thing. It’s called a B corporation. “Directors and officers are required to consider the best interest of workers, the community, and the environment in addition to the best interests of shareholders.” (1)
The U.S. Small Business Administration offers a description: “A benefit corporation, sometimes called a B corp, is a for-profit corporation recognized by a majority of U.S. states. … B corps are driven by both mission and profit. Shareholders hold the company accountable to produce some sort of public benefit in addition to a financial (return).” (2)
Note that B corporations are not tax-exempt entities: taxation structures are similar to those of other styles of corporations. (2)
“Some states require B corps to submit annual benefit reports that demonstrate their contribution to the public good. There are several third-party B corp certification services, but none are required for a company to be legally considered a B corp in a state where the legal status is available.” (2) A leading certification group is B Lab. (3)
In short – B corporations are all about doing good while doing well. (Scott says: “Now THAT’S a concept!”)
Sources:
(1) https://www.cpajournal.com/2016/08/01/benefit-corporations-b-corporations/
(2) https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
(3) https://www.bcorporation.net/en-us/certification)
Background:
https://www.forbes.com/sites/katejacksonk/2020/02/18/why-be-a-b-corp/?sh=6a124b8a6ea1
https://cbey.yale.edu/sites/default/files/2019-09/
https://www.uschamber.com/co/start/strategy/b-corp-advantages-and-requirements
Counterpoint: https://www.forbes.com/sites/jaycoengilbert/2018/08/30/are-b-corps-an-elite-charade-for-changing-the-world-part-1/?sh=792e32717151