Benefit corporations are required to have a purpose to create a general public benefit. A general public benefit is defined as a "material positive impact on society and the environment." Public benefit corporations allow directors to balance profit with community benefits. Entrepreneurs and investors who want to do good for the world while making a profit favor public benefit corporations.
Benefit corporations must consider how their selections affect both shareholders and stakeholders. Benefit corporations presently operating in America come from various industries, including service and retail.
Examples of Public Benefit Corporations
What is an example of a public benefit LLC?
A public benefit LLC is a type of for-profit corporate entity authorized by over 30 states to balance profit with community benefits. Examples include Ecosia, Kickstarter, and Patagonia. Public benefit corporations commit to creating positive public impact and sustainable value in addition to profit.
Public benefit corporations work by balancing pecuniary interests of shareholders with interests of stakeholders like employees and advancement of intended public benefit. Advantages include legal governance requirements for certification, preserving founder principles, addressing shareholder primacy concerns, and branding ethos to attract customers, clients and employees.
Some public benefit corporations are government-provided entities like public transit systems, libraries, and hospitals. To become a public benefit corporation, businesses include language about social mission in corporate charter and create third-party review boards to ensure accountability and transparency in complying with these missions.
Becoming a Public Benefit Corporation
To become a public benefit corporation, businesses include social mission language in corporate charter and create accountability through third party reviews.
Advantages of public benefit corporations include attracting employees and customers by addressing concerns about shareholder primacy and legal requirements for certification. Public benefit corporations consider how choices affect shareholders and stakeholders, thus providing both economic and social value.