B corporations are particularly a unique entity. It means that your business has decided to purse a higher standard of purpose. B Corps are committed to upholding a specific social or environmental mission or otherwise using business as a force for good.
The process for creating a certified B Corporation does differ a bit from forming other entities like limited liability companies. B Corporations conform to higher standards than companies that are not B Corp certified. Before you decide to incorporate as a certified B Corp, there are some questions you need to answer to make sure this entity is the best fit for your business.
Almost any kind of product or service a business offers is eligible for certified B Corp status. The one catch is that the company must be able to adopt specific standards of purpose, accountability, and transparency.
Take some time to reexamine why you started your business. Becoming a certified B Corp makes it possible to be a for-profit company that commits to a general public benefit. Businesses that commit to a general public benefit aim to have a positive impact on society. B Corporations are a hybrid between standard corporations and nonprofits.
To become a certified B corporation, businesses need to first take and pass the free B Impact Assessment. The B Impact Assessment (BIA) helps measure and manage your social and environmental impact. The test includes a series of questions that focus on what it takes for your company to build a business that is better for its workers, community, and the environment.
Those who want to be fully certified need the full impact report. This takes about two or three hours to complete, and you will be able to view your results holistically. If you pass your test, you are on your way to being certified.
A business that aims to become a certified B Corporation should integrate some element of sustainability into its company mission.
Depending on your state of incorporation and existing corporate structure, you may need to make the following legal changes:
Benefit corporation advantages include:
Benefit corporation disadvantages include:
Once that is done, your final documents will be reviewed. You will then have to sign the B Corp Declaration of Interdependence and sign your agreement. After that you will pay your annual certification fees. The fees are listed on the B Corporation website.