Some US states approved a law at the beginning of 2012 that alters the way of doing business in the country by creating benefit corporations, a new form of business required by law to create general benefit for society as well as for shareholders.
New York is the seventh State to pass this law after Maryland, California, Hawaii, Vermont, Virginia and New Jersey. It is a revolutionary shift in a country where profit maximization is the dominant logic.
The difference with a regular corporation is that this new form of business acts not only in the interest of its shareholders, but also of the community in which it operates.
In fact while the mission of a corporation is to maximize profit for shareholders and in case it fails to conduct itself in that manner it may be held legally liable and face civil penalties, a benefit corporation must legally account for a variety of considerations as it pursues its mission. Fiduciary duty for benefit corporations must include non-financial interests, such as social benefit, employee concerns, and environmental impact.
Benefit corporations create a new corporate form of business, one which is for-profit while also creating a material positive impact on society and the environment.
In order for a company to become a benefit corporation it must apply through the State and publish an annual public report that shows its performances in social and environmental areas.
Benefit Corporations are certified by the nonprofit B Lab, to prove that they are not only meeting their goals but treating their employees, customers, communities and local environments with the same respect as their shareholders. Benefit Corporations can lose their B Corp title and their legal status for not doing right by these standards. B Lab also helped draft the original law that’s been replicated in seven US States.
Commenting on the advantages of this new and innovative form of business, US State Senator Daniel Squadron , who sponsored the bill on benefit corporations, remarked that: “Benefit corporations will mean New York is open for business in an important new way. Benefit corporations will unlock billions of dollars in new investments in New York while empowering companies to do well and do good. By offering this opportunity to entrepreneurs and investors, New York will bring new businesses into the State, new investors into the market and a new socially-minded approach for our entrepreneurs”.
To read more: http://www.bcorporation.net
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