PBCs & THEIR MISSION
A NEW LEGAL STRUCTURE
A “benefit corporation” or in Colorado called a “public benefit corporation” (or “PBC”) is a relatively new form of legal entity for a business structured as a corporation. A PBC is a specific type of for-profit corporation that allows, and actually even mandates by state statute, that one or more social benefits be a “charter purpose” for the company’s existence, in addition to its traditional business goal of creating economic return.
A PBC therefore is a unique form of company that serves the dual purposes of generating profit while also producing certain social or environmental objectives. When it was signed into law (starting April 1, 2014), it was the 16th state in the country to recognize the need and to provide for the legal structure to formally allow for-profit businesses to also have a social benefit focus. As of the date this description was written, 33 states and the District of Columbia have approved benefit corporations. By law, benefit corporations commit to operating with higher levels of business, social, and environmental responsibility, accountability, and transparency. In operations, such companies are obligated to consider the impact on society and the environment in their decision-making process.
BENEFIT CORP VS. B-CORP
It should be noted that “Benefit Corp” and “B-Corp” are not interchangeable terms, as many people currently use them. A “Benefit Corporation” as described above is a legal structure for a business, now available in 33 states and the District of Columbia. While a B-Corporation (or “Certified B-Corporation”®) is a certification program managed and issued by the nonprofit organization B-Lab, and is available for all companies to apply irrespective of how they are legally structured. However, with B-Corps, no legal or state statute mandates a company exist to have a specific social benefit purpose.
For more information on “Benefit Corporations,” go to: https://benefitcorp.net/.