A combination of a non-profit and for-profit business, is slowly gaining speed and popularity nationwide. Here is why you may want to consider it.
If you haven’t heard any of the buzz surrounding the rise of the Benefit Corporation, you have some serious catching up to do in the business world! The newest business structure wild card, a combination of a non-profit and for-profit business, is slowly gaining speed and popularity nationwide. Thus far, about 20 states have passed Benefit Corporation legislature including Delaware, frequently considered the biggest state trendsetter in the incorporation world. The fact that a state with that much influence has firmly decided to back the B Corp says a lot about its future as a staying entity for companies that want to commit a general public benefit that creates a lasting material impact on society.
If that sounds like it’s right up your startup’s alley, here are five additional perks to filing for a Benefit Corporation.
B Corps are a class (and entity) of their own.
What makes the Benefit Corporation so special is the combination of a non-profit business and for-profit business (like a C-Corp) by being an entity that is built around a social responsibility, but still has the ability to make a profit. No other business structures have these sorts of options available to them!
2. Do good and make a profit.
Entrepreneurs have the ability to make a profit along the way while keeping the cause close to the business.What better reason to start a business than to help benefit a cause one is passionate about? When a company incorporates as a B Corp, they adopt to higher standards of purpose, accountability, and transparency. Having both elements (the cause driving the business to commit to a higher sense of purpose, and the ability to make money) is great because non-profits have always been popular for entrepreneurs. Now, those entrepreneurs have the ability to make a profit along the way while keeping the cause close to the business.
3. You get to create a really positive brand.
With a Benefit Corporation, you get to be a for-profit company that is also striving to make the world a better place, which makes your brand even more buzzworthy and well regarded. Business owners get to focus on environmental/social issues while still reaping the financial benefits, which looks good for shareholders. Some shareholders may be skeptical about working with non-profits because they have less of a focus on revenue, but knowing that you and your certified Benefit Corporation are interested in making a profit while supporting social or environmental purposes, puts shareholders at ease to invest in your company.
4. Less confusion when filing as a Benefit Corporation.
If you know the ins and outs of for-profit entities and did your research beforehand, then you’ll grasp the paperwork of Benefit Corporations just fine. Keep in mind that once you are B Corp certified, your company must publish an Annual Benefit Report that charts out and details the ways in which the B Corp has pursued the public benefit and the extent to which the benefit was created
5. Bring in those customers!
Lastly, Benefit Corporations have their service-based motto embedded into their structure, so your customers will know right away that any business filed under a B Corp entity will be environmentally and socially conscious. Customers will feel more compelled to shop at a purpose-driven business than a non purpose-driven business. Everyone wants to feel that they are making a difference and doing good in the world and supporting a B Corp is a great step to take!