Wed, 29 June 2022
What Is a Benefits Corporation?
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
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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