With all this “B Corp” buzz in the air, it’s time to get one thing straight: the Benefit Corporation and the “B Corp” are not created equal. The terms are often used interchangeably, and it’s not necessarily wrong to say “B Corporation” or “B Corp” to informally describe a Benefit Corporation either. People understandably confuse the two, since both similarly aspire to cement a social or environmental purpose in a company’s mission and corporate governance structure.
But there is still a key difference between the pair: the benefit corporation is a legal entity recognized under a state’s corporate laws, while the “B Corporation” (or B Corp) is a certification conferred upon a company by a certifying organization. A company can be a B Corp without being a Benefit Corporation – and vice versa – but it’s important to know that while these two sound similar enough at first glance, they actually function fairly differently from one another.
Entrepreneurs, take note! There’s big news on the B Corporation front – this August, Delaware became the 19th state to enact benefit corporation legislation, a move that signals the new business entity’s staying power.
While it’s true that 18 other states and D.C. are already on board the B Corp train, Delaware has an especially longstanding, notable reputation as a corporate haven, and as an important and influential player in the business community. In other words, people in business pay extra attention to Delaware, and when Delaware passed benefit corporation legislation, it was a very big deal. The state’s legal recognition of benefit corporations will spark more momentum for a movement that aims to sink legal teeth into the notion that companies should mold their missions to benefit society as a whole, instead of primarily focusing on maximizing profits for shareholders.
It’s a question that’s much more commonly asked than you think – are there any benefits to non-U.S. residents filing corporations or LLCs in the United States or is the process so complicated that it’s best to avoid doing it? The answer is the procedure is fairly similar to what residents of the United States experience filing and that yes, there are a series of great benefits that come in doing so.