Benefits Corporation (B-Corp) (see also Public Benefits Corporation)
A corporation permitted to have other “public interest” purposes set out in its charter to also provide for specific alternate purpose instead of primarily maximizing profit for stockholders. In a traditional general corporation, the duty of the directors is to maximize profits and value for the stockholders. Many people have heard of companies that give away two pairs of eye glasses for each pair they sell or give away a free pair of shoes to children in third world countries for each pair they sell. Typically, this type of activity could result in a lawsuit by the stockholders against the management for wasting corporate assets. However, in a public benefit corporation, that type of activity is expected and required. In Delaware, a public benefit corporation must set out in its certificate of incorporation that it is a public benefit corporation and provide a specific public benefit, which is reviewed and approved by the Delaware Secretary of State. Most other states that have public benefit corporation laws do not require a specific benefit to be listed. Without being filed as a public benefits corporation, you may become “certified” as a B-corp by an organization located in Pennsylvania called B-Lab. Sometimes certified B-Corps are allowed special tax benefits or are open to investors who are interested in doing something for the public good.