Benefit Corp vs. Certified B Corp
What's the difference in a B?
Ideaction Corps is both a certified B Corp and a legal Benefit Corporation in the State of Illinois. What is the difference? Why both?
B Corp is a certification offered by a non-governmental organization named B Lab. A Benefit Corp is a state government legal corporate structure. You do not need to be certified to be legal, and you do not need to be legal to be certified.
Companies wishing to become a certified B Corp complete an Impact Assessment. A company not only has to meet certain social and environmental criteria, but provide support documents to become fully certified. Furthermore, company bylaws must eventually be amended to include stakeholder interests. Certification is available to companies in all 50 states and in countries all around the world.
Companies wishing to be a legal Benefit Corporation legally structure their company (usually by amending their bylaws) to embed social or environmental principals into their DNA. State laws vary, but Benefit Corporations are typically required to meet accountability, transparency and reporting standards as well. Becoming a legal Benefit Corp does not affect a company's tax status (unless you are converting from a 501c3 to a for-profit). Benefit corporation as a corporate status is legally recognized by 20 states and the District of Columbia as of the start of 2013.
Ideaction Corp first became a certified B Corp in July of 2012. We amended our corporate structure to become one of Illinois' first legal Benefit Corporations as soon as this option was available - January 2, 2013. Why?
Why we decided to become a Certified B Corp:
- The assessment helped us to build our business in a way that aligned with our belief that you can do well and do good. We love nonprofits, but we do not believe that the 501c3 tax status owns the good box.
- The reporting requirements help us stay on top of our game - tracking our give-back and our impact.
- We have access to a portfolio of services and support from B Lab to help us with marketing, sales, raising money, saving money, learning from and doing business within the community of more than 900 Certified B Corps around the world.
Why we decided to become a legal Benefit Corporation:
- We support this national movement, and wanted to walk the walk. We felt it was important to lead by example.
- It is both inspiring and helpful to be a part of a community of businesses in Illinois that are that want to consider society and the environment in addition to profit in their decision making process, we believe that by aligning ourselves with like-mineded mission driven businesses, impact investors and social entrepreneurs there are increased opportunities for collaboration and impact. And joy.
If you are interested in become a certified and/or legal B Corp, Ideaction Corps can help.
For more information about the similarities and differences in certification and legal structure, here are some terrific resources: