- "In the United States, a benefit corporation is a type of for-profit corporate entity... that includes positive impact on society, workers, the community and the environment in addition to profit as its legally defined goals."
This type of LLC is designed to focus on creating a positive impact on society and the environment while still generating profit.
Legal Structure of LLC: Explains what an LLC is and how it is formed legally.
Benefit LLC: Defines what a Benefit LLC is and how it differs from a traditional LLC.
Benefit Corporation: Explains the difference between a Benefit LLC and a Benefit Corporation.
Articles of Organization: The legal document required for forming a Benefit LLC.
Operating Agreement: An agreement that outlines the management structure and ownership of a Benefit LLC.
Benefit Statement: A statement outlining the social or environmental goals of the Benefit LLC.
Fiduciary Duties: The legal responsibilities of the managers of a Benefit LLC towards the social and environmental goals of the company.
Third-Party Standard: An accreditation standard that a Benefit LLC can achieve to demonstrate compliance with its social or environmental goals.
Reporting and Disclosure: The requirements for a Benefit LLC to regularly report on its social or environmental impact.
Taxation: How Benefit LLCs are taxed and the potential tax benefits of being a Benefit LLC.
Member Liability: The extent to which members of a Benefit LLC are personally liable for the company's debts and obligations.
Conversion: The process of converting an existing LLC into a Benefit LLC.
Dissolution: The process of ending a Benefit LLC and distributing its assets.
Comparison with Other Legal Structures: A comparison of Benefit LLCs with other legal structures such as traditional LLCs, corporations, and partnerships.
Low-Profit Limited Liability Company (L3C): This is a type of Benefit LLC that combines the flexibility and tax benefits of a traditional LLC with a social or environmental mission.
Social Purpose LLC: A Social Purpose LLC is a Benefit LLC that is organized for a specific social purpose or mission. This structure requires that the LLC's governing documents reflect the social purpose, and the company must demonstrate that it is fulfilling its mission.
Public Benefit LLC: This type of Benefit LLC is also known as a "not-just-for-profit" LLC. It has a mission to benefit the public or a specific community, and it is required to create a public report that outlines its social and environmental goals.
Community Interest Company (CIC): This is a type of Benefit LLC that is popular in the UK. It operates like a regular LLC but is required to prioritize its community or social benefit mission over generating profits.
Certified B Corporation: A Benefit LLC can also become a Certified B Corporation, which is a third-party certification that requires the LLC to meet particular social and environmental standards.
B Corp Benefit LLC: A B Corp Benefit LLC is similar to a Certified B Corporation in that it meets particular social and environmental impact standards. To achieve a B Corp designation, the LLC needs to score at least 80 points on the B Impact Assessment.
Flexible Purpose Corporation (FlexC): A Flexible Purpose Corporation (FlexC) is a type of Benefit LLC that is only available in California. The LLC has a social or environmental mission that is specified in its governing documents, and it is legally required to consider its social purpose when making decisions.
- "Authorized by 36 U.S. states and the District of Columbia..."
- "The definition of 'best interest of the corporation' is specified to include impacts on society, workers, the community, and the environment."
- "A C corporation may change to a B corporation merely by stating in its approved corporate bylaws that it is a benefit corporation..."
- "One main reason businesses in Maryland had chosen to file as benefit corporations was for community recognition of their values."
- "Directors and officers are required to consider the impact of their decisions not only on shareholders but also on employees, customers, the community, and local and global environment."
- "The benefit corporation legislation ensures that a director is required to consider other public benefits in addition to profit."
- "Transparency provisions require benefit corporations to publish annual benefit reports of their social and environmental performance..."
- "A benefit corporation need not be certified or audited by the third-party standard."
- "Other organizations that choose to operate under the business formation of a benefit corporation may also want to engage in receiving a B Corp certification from a third party."
- "A benefit corporation is used 'to merge the traditional for-profit business corporation model with a non-profit model...'"
- "Directors and officers operate the business with the same authority and behavior as in a traditional corporation but are required to consider the impact of their decisions..."
- "Shareholders typically judge a company's well-being on its long-term financial success, in addition to public perception and quality of product..."
- "In recent decades quarterly trading reporting has led to hyper-focus on short-term gains."
- "The benefit corporation legislation ensures that a director is required to consider other public benefits in addition to profit, preventing shareholders from using a drop in stock value as evidence for dismissal or a lawsuit against the corporation."
- "However, few of the states have included provisions for removal of benefit corporation status or fines if the companies fail to publish benefit reports that comply with the state statutes."
- "There are around 12 third-party standards that satisfy the reporting requirements of most benefit corporation statutes."
- "In this case, some authors have examined and pointed out that in the current 36 states who recognize benefit corporations as legal business forms the law regarding the requirement of certifications for operation differs from state to state."
- "Other research promotes the synergy between a benefit corporation and employee ownership."
- "A benefit corporation is used 'to merge the traditional for-profit business corporation model with a non-profit model by allowing social entrepreneurs to consider interests beyond those of maximizing shareholder wealth.'"