B Corp and Public Benefit Corporations: Understanding The Differences


The concept of corporate social responsibility has become increasingly important over the last decade, with many organizations striving to make a positive social and environmental impact. Two of the most popular ways to ensure a company is meeting its social responsibility goals are B Corps and Public Benefit Corporations (PBCs).

But what is the difference between the two? This blog post will explore the differences between B Corps and PBCs and how they can help companies meet their social responsibility goals.

What Is a B Corp? 

A B Corp is a designation that recognizes a business meeting rigorous social and environmental performance standards, accountability, and transparency set by the nonprofit organization B Lab. To qualify for certification as a B Corp, an organization must first fulfill three main criteria:

  • A public benefit mission
  • Adequate organizational structure
  • Legal form

If these criteria are met, then a C Corp or LLC can become certified as a B Corporation by filling out an online application that includes audited financial statements from the last fiscal year and other information requested by the application.

Benefits of B Corp

Once certified, B Corps must maintain the certification through annual recertification. The business must continue meeting stringent social and environmental responsibility standards to retain its certification.

As a result, certified B Corps can be relied upon to uphold their social responsibility goals, providing a level of trust to their customers. Additionally, certified B Corps can access certain benefits, such as tax deductions, grants, and discounted services.

What Are Public Benefit Corporations?

Public Benefit Corporations (PBCs) are similar to B Corps in that they also emphasize social responsibility but differ in how they are structured. PBCs are organized as public-benefit entities that must consider the interests of workers, the community, and the environment when making decisions.

While B Corps require certification, PBCs require the company to file articles of incorporation that outline the company’s public benefit goals.

Additionally, PBCs are required to make annual reports detailing their efforts to reach their public benefit goals. These reports are made available to the public, providing transparency about the organization’s social responsibility efforts.

Benefits of Public Benefit Corporations

Becoming a PBC is a great way to show potential customers, investors, and other stakeholders that your company is committed to positively impacting the world.

PBCs are also eligible for certain benefits, such as grants and tax incentives, to help your organization reach its goals. Additionally, the transparency provided by the annual reports required by PBCs offers assurance that your organization stays true to its social responsibility goals.

The transparency provided by the annual reports required by PBCs assures that your organization is staying true to its social responsibility goals.

In Conclusion

Both types of corporations provide businesses with different opportunities and benefits. When considering which type of corporation to apply for, it’s essential to look at all aspects of the company, including goals, mission statement, and desired endgame, before making a decision.

Depending on these factors, you should seek guidance from legal professionals and find a list of questions to ask yourself before deciding.

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