Is your business venture motivated by more than profits? Do you want to start a “triple bottom line” business, to pursue both social impact and financial self-sufficiency? If so, Benefit Corporation legal status might be right for you.
A Benefit Corporation is a hybrid legal entity that blends elements of nonprofit and for-profit corporations. It is taxed like a traditional corporation. It protects directors from liability for pursuing a social objective instead of simply profit. Benefit Corporations measure both financial and social bottom lines, and report their social and environmental impacts in an annual Benefit Report.
|Advantages of Benefit Corporation Legal Status|
|SUPPORTS ACCOMPLISHMENT OF SOCIAL MISSION||Allows directors and officers to consider social mission in making decisions. Also ties future owners to the same mission.|
|LIABILITY PROTECTION||Provides liability protection for directors and officers to consider interests other than profits.|
|ATTRACTS CUSTOMERS AND TALENT||Demonstrates commitment to social mission to both customers and employees.|
|ACCESS TO CAPITAL||Traditional for-profit capital:
· Can sell shares/equity
· Impact investors
· Bank loans and SBA- guaranteed loans
Traditional nonprofit capital:
|TAX STATUS||Same as NYS corporation|
|HOW TO FILE||Same filings required as NYS corporation. Must include purpose of creating general public benefit in your Articles of Incorporation and Corporate Bylaws.*|
|TRANSPARENCY||Publish an annual Benefit Report including a third party assessment of social and environmental impacts.|
Social Enterprise Counseling
We provide assistance for entrepreneurs seeking to directly address social and environmental problems through their business. SBDC’s Social Enterprise Services include free one-to-one counseling in the following areas: social business planning, Benefit Corporation filing, social impact measurement and reporting, and financing your social enterprise.
For more information, contact:
Cleveland Hall 206
1300 Elmwood Avenue Buffalo, NY 14222
Phone (716) 878-4030