Something big has been happening in the world of business, and that something goes by the name of the benefit corporation. Recently, Delaware became the 19th state to enact benefit corporation legislation, which, of course, surprised very few in the world of start-ups because Delaware has long held a reputation for being one of the most incorporation friendly states in the nation. So with Delaware, a big leader for all things business, backing the legislation it seems that benefit corporations are here to stay, and can only grow and become more popular from here on out!
With 20 states already having passed the legislature for B Corps, here are three reasons why the remaining 30 states in the U.S. should take Delaware’s lead on passing benefit corporations.
You get the best of both worlds
When you file for a benefit corporation, you are setting up your business with the purpose-driven intention of a non-profit (often one that is intent on making the world a better place), but while still making a profit in the process. B Corps provide market differentiation for small businesses that want to identify themselves as having a mission, and who aim to prioritize purpose and profit simultaneously. They give entrepreneurs the opportunity and the flexibility to use the power of owning a business to address the social and environmental issues they see important.
You have more options
One of the simplest, but most impactful, benefits of B Corporations becoming an active entity type is that it gives entrepreneurs more options to choose from when deciding which entity best fits them and their business. Picking an entity type is one of the most important decisions a new business owner has to make, so the more options available the better!
The mission of your business is never far from your mind
Any entrepreneur who enters into a purpose-driven venture will want to strongly keep the business’s mission on the top of their priority list. Incorporating as a B Corporation cements a company’s social or environmental purpose into its corporate legal structure. This ensures a certain permanence of the business’s mission—even if the business were ever to be bought out, the mission will continue to stand tall. By focusing on social responsibility, entrepreneurs can also take into consideration the feedback they receive from other business owners and customers regarding the public benefit their business provides in order to keep focusing on the good.
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