What is a Public Benefit Corporation?
Public Benefit Corporations (PBCs) are a type of for-profit corporate entity. What makes them unique is that they must, in their charter, include at least one specific public benefit as a statement of purpose. In addition to shareholder profit, these companies are beholden to that mission as they pursue corporate activities.
Can an existing companies become a PBC?
Public Benefit Corporation (PBC) status is not exclusive to new companies; existing companies can convert into PBCs by amending their charters to include a specific public benefit in their statement of purpose.
What sort of public benefits qualify a company for PBC status?
The benefits can be artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological in nature.
What is a B Corp?
In addition to being PBCs, companies can also be B corps. This means they've been certified by B Labs, a non-profit entity that creates standards for organizations to meet in terms of verified social and environmental performance, public transparency, and legal accountability. The key distinction to keep in mind is that a benefit corporation is a corporate legal entity, and "B Corporation" is a certification, like Fair Trade or USDA Organic.)
What should companies consider when becoming PBC?
Choosing to pursue PBC status has important implications for corporate activities. For most corporations, the Board's primary goal is to maximize shareholder value, and they are legally compelled to make decisions with that aim in mind. Board Members for a PBC must also take into account the interests of people impacted by the company’s conduct, and the specific public benefit outlined in the company’s charter. These additional goals change some corporate processes and paperwork, and it is these differences that we’ve updated our platform to address.