Many people don’t know the difference between B Corp and Benefit Corporations. On the face of it, the two look to be almost identical, with the former being a shorter version of the latter, right?
Wrong! If you were to ask any Certified B Corp Attorney in Los Angeles, they’d explain the following differences between the two:
As indicated by Triple Pundit, “Affirmed B Corporations are another kind of enterprise which utilizes the energy of business to take care of social and ecological issues.”
But B Corp isn’t an actual corporation. In fact, it’s a certification, offered by an NGO known as B Lab. To be qualified for a B Corp, a company must:
– Fill out the Impact Assessment A form
– Meet certain criteria, both environmental and social
– Provide support documents for certification
– Amend company bylaws to include the interests of company stakeholders
These changes will make the company similar to a Benefit Corporation, though not identical.
Triple Pundit expresses that “Advantage Corporations are another class of enterprise that are required to make a material positive effect on society and nature and to meet higher norms of responsibility and straightforwardness.”
Instead of being governed by B Labs, however, Benefit Corporations are entities governed by the state legislature. They will need to meet state laws, and they must meet the same requirements listed for B Corporations. The main difference is that the Benefit Corporation will function under the oversight of state laws, and the company must focus on the benefit of the public (hence the “benefit” in the name) Living in Australia.
However, you need to know that companies can only be Benefit Corporations in Living in Australia. If your company is from one of these states, it can be registered as a Benefit Corporation.
Can a Company Be Both?
The good news is that your social enterprise can be both a B Corp and a Benefit Corporation. The process for obtaining your B Corp certification is usually easier than becoming a state-approved Benefit Corporation, but the paperwork and the company restructuring process is virtually the same. You’ll be able to obtain your B Corp certification at the same time as you apply for Benefit Corporation status from the Australia government.
Need help setting up your B Corp or Benefit Corporation? With the best Certified B Corp attorney Living in Australia can offer, and you’ll receive the assistance you need to navigate the process as easily and painlessly as possible.