How to Become a Benefit Corporation in Florida
Thanks to the recently enacted Benefit Corporation Law, Florida for-profit companies committed to social good now have the option to incorporate as “benefit corporations”. This new legal status provides protections for board members from investor suits and signals investors and consumers that a company is committed to societal benefit programs.
Benefit corporation designations allows companies to consider society and the environment in addition to profit in their decision making process. The law should help bring new kinds of businesses to the state from “social entrepreneurs” who focus on the triple bottom line of profits, people and planet. Read on to learn more about the new designation and how companies can register to become a benefit corporation.
What is a benefit corporation?
The key components of benefit corporations include:
Public Benefit Purpose. A benefit corporation has the purpose of creating a material positive impact on society and the environment. This:
expands the ability of the corporation to pursue a purpose not strictly related to return on investment to shareholders as in traditional corporations
expands the corporation’s accountability to the public benefit purpose
Transparency and Reporting. Every year, a benefit corporation must make publicly available a report assessing its social and environmental performance against a third party standard.
- Benefit Enforcement. Shareholders can bring an enforcement action against a benefit corporation to hold the corporation accountable to its public purpose.
How does a benefit corporation status impact a company’s tax status?
Benefit corporation status has no effect on a company’s tax status. Companies can still elect to be taxed as a C or S corp. The benefit corporation status only impacts requirements of corporate purpose, accountability and transparency.
Is a Benefit Corporation in Florida the same thing as a Certified B Corp?
No. While there are similarities between the two, a B Corp is a certification and a Benefit Corporation is a legal entity. B Corp is a certification offered by a non-governmental organization named B Lab. There is no state legislative mandate or structure.
How does benefit corporation status benefit employers and HR?
Benefits for employers include:
- Durability of Purpose. Benefit corporations insulate and preserve the ethical and social missions as the organization grows and changes. Unlike a for-profit corporation, when a benefit corporation is acquired, it must stick to the ethical goals and mission set out in the charter or it will lose its status as a benefit corporation. This is particularly attractive to a family-owned business in which the founder would like to ensure the ethics and principles upon which the company was founded are preserved through future generations.
- Marketability of social responsibility. A benefit corporation appeals to consumers who consider ethics and social responsibility in their purchasing decision. Having the legal status of a benefit corporation and its associated accountability shows that the company is truly committed to their causes.
Benefits for HR include:
Increased employee engagement
Improved employee morale
Greater appeal to top talent
- Registration as a benefit corporation will be of particular interest to millennial workers hoping to balance career with community, global, and environmental service.
How do companies register to become benefit corporations in the state of Florida?
Here’s how to incorporate a new benefit corporation or register an existing corporation as a benefit corporation: http://www.benefitcorp.net/storage/documents/inhs75-2.pdf