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.
On the first day Delaware’s benefit corporation became available, a record-setting 17 companies jumped at the opportunity to incorporate under the new business form. This first-day enthusiasm is unmatched by any other state upon enacting their versions of the benefit corporation. Among Delaware’s first benefit corporations were many popular companies such as “green cleaning” company Method, and organic baby food company Plum Organics.
As more and more mainstream brands choose this path, more and more social entrepreneurs will consider the B Corporation as an option for their small businesses. And having more options is always a good thing so here at MyCorp, we thought we’d pull together a list of the 5 things we like about benefit corporations.
- Benefit corporations give entrepreneurs more opportunity and flexibility in using the power and scale of business to address important social and environmental issues.
- The new entity type provides market differentiation for small businesses that want to identify themselves as mission-driven companies who aim to prioritize both purpose and profit.
- Social entrepreneurs now have more options since benefit corporations can provide a happy medium between the traditional for-profit (C-Corp) and nonprofits.
- Incorporating as a benefit corporation cements a company’s social or environmental purpose into its corporate legal structure, which better ensures the permanence of its mission – even in a liquidity event like a buyout.
- By focusing on social responsibility, business owners can leverage the positive feedback from other business owners and customers regarding the public benefit underpinnings of their business
Got a couple more questions about forming a benefit corporation, or ready to start the process? Give call us at 1(877) 692-6772 or leave a comment below!
Deborah Sweeney Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With extensive experience in the field of corporate and intellectual property law, Deborah provides insightful commentary on the benefits of incorporation and trademark registration. Education: Deborah received her Juris Doctor and Master of Business Administration degrees from Pepperdine University, and has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in corporate and intellectual property law. Experience: After becoming a partner at LA-based law firm, Michel & Robinson, she became an in-house attorney for MyCorporation, formerly a division in Intuit. She took the company private in 2009 and after 10 years of entrepreneurship sold the company to Deluxe Corporation. Deborah is also well-recognized for her written work online as a contributing writer with some of the top business and entrepreneurial blogging sites including Forbes, Business Insider, SCORE, and Fox Business, among others. Fun facts/Other pursuits: Originally from Southern California, Deborah enjoys spending time with her husband and two sons, Benjamin and Christopher, and practicing Pilates. Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Deborah, and MyCorporation, have previously been honored by the San Fernando Valley Business Journal’s List of the Valley’s Largest Women-Owned Businesses in 2012. MyCorporation received the Stevie Award for Best Women-Owned Business in 2011.