Increasingly, social entrepreneurs struggle to choose a legal form for their ventures. The traditional legal forms are not suited to blended social and profit-making purposes. Mangers of a for-profit socially responsible business can find themselves liable to shareholders for failure to maximize profit at all coasts. Conversely, managers of tax-exempt nonprofits conducting social entrepreneurial activities can find themselves liable to the IRS when they try to reward investors and incentivize results.
Daily Dose of Nonprofit Law
Category Archives: Benefit Corporation
More Legal Structure Choices Becoming Available for the Socially Responsible Business by Keren Raz
It has been a busy year for proponents of new legal forms. The benefit corporation goes into effect in Virginia on July 1. Benefit corporation legislation has also been introduced in California, Colorado, Hawaii, North Carolina, Pennsylvania, and Michigan. Maryland, the first state to pass benefit corporation legislation, recently authorized LLC versions of the benefit corporation.
B Corps is Not a New Legal Form by Keren G. Raz
Critically, a Certified B Corporation (hereinafter referred to as B Corps or a B Corporation) is a label given by B Lab to businesses that pass a socially responsible certification process. B Corps is not a legal form and has no legal significance. A benefit corporation, on the other hand, is a new legal form, that became law in Maryland on October 1, 2010. Legislation similar to that in Maryland will become law in Vermont in July and was recently passed by the New Jersey legislature.
Carter Law Group – A Certified B Corp.
Carter Law Group is pleased to announce that B Labs has certified us as a B Corporation, Arizona’s first!
Maryland First State to Recognize Socially Responsible “Benefit Corporation”
The benefit corporation concept has some similarities to the L3C model but is geared toward corporations rather than LLCs. Like the L3C, benefit corporations pursue a mission that goes beyond making a profit for owners and investors. Importantly, it also provides legal protection for board members that consider social and environmental issues when making decisions on behalf of the corporation.
