The difference between a Benefit Corporation and a (certified) B-Corp

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Benefit Corporations

How to create a benefit corporation: File articles of incorporation (or amend current articles) in a state authorizing the legal form. Benefits: Legal "cover" for officers and directors to make decisions that may negatively affect the bottom line; attract social investment capital due to legal form requiring consideration of benefits; limits personal liability to shareholders and management. Draw-backs: Limited to the benefit corporation legal form. A benefit corporation is subject to several administrative burdens including filing an annual benefit report, performing a yearly audit against a third-party standard, requiring officers and directors to take into account company stakeholders when making decisions, and potentially subject to an independent benefit director. Finally, this is a new and untested legal entity; therefore, the liability exposure to shareholders officers, and directors has not yet been shaped by case law.



How to get certification: There are four main steps to B-Corp certification. 1. Your company must take the B Impact Assessment, which evaluates the impact your company has on its stakeholders. The company must achieve a score of 80 out of 200 points (determined by business industry and number of employees). 2. Your company must be reviewed by a B-Labs staff member. This Review is a chance for B-Labs to verify your company's Impact Assessment and custom fit what might be best practices for your company's situation. 3. Your company's current and future management and ownership must be legally bound to take into consideration its stakeholders. This requirement is met through the language in the company's organizing documents--articles of incorporation for corporations, certificate of formation for LLCs, etc.--and will vary depending on the state of incorporation. 4. Pay a fee to B-Labs (from $500 to $25,000). Once certified, a company is susceptible to a random impact audit.

Additional Resources

For more information on B-Corp certification and benefit corporations, head over to B-Labs: And for more information on the law of social enterprises, visit the Apex Law Blog at or feel free to send me an email at

Apex Law Group

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