What are the basic pros and cons of a B Corp (Benefit Corporation)?

From a business standpoint, it can be difficult to distinguish a blanketing list of pros and cons as it is likely slightly different based on the type of business you have. However, generally speaking, there are a few considerations about B Corps that will likely be present no matter what type of business you are conducting.

Potential Pros

  • Many investors are attracted to the social and environmental impacts of B Corps. This type of business “speaks” to a very specific pool of investors who are eager to put their money toward a business that not only makes a profit, but actually has an impact on the world. That’s an incredibly attractive selling point when discussing investment potential.
  • As a founder, you can have the satisfaction that your business is playing an active role in global success. B Corps are a “big picture” type of business in the way that it doesn’t just follow the basic process of sell a product and earn a profit. Instead, it creates an emotional experience for the consumer as they make a purchase that actually has an impact.
  • You have to meet a standard to qualify as a B Corp. If your company possesses the coveted B Corp certification, then that tells consumers that your company meets exceptional standards when it comes to social and environmental performance.
  • B Corps are gaining momentum and it can be a great marketing tool. Many companies that have this certification are more than happy to discuss various resources and help newer companies understand the ins and outs of conducting business this way.

Potential Cons

  • B Corps are new to the business world. There is a level of uncertainty that exists that only time will tell of its challenges and how businesses owners will navigate potential problems in the future.
  • There aren’t any corporate tax breaks (unless you have tax-exempt status). This could be considered a bad thing based on the goals you have for your business.
  • Not everybody has accessibility to this type of incorporation. Because it’s so new, you’ll need to check with your state to see if this is a viable option.
  • Accountability that comes with a B Corp can be a double-edged sword. You have to be sure that your business remains at the standards set forth in the certification or else you’ll run the risk of losing it.

B Corps are an interesting change in business that many companies are interested to learn more about. LawTrades can connect you with a seasoned business attorney that can help you understand the finer details of B Corps and whether or not this is a viable solution for you. Contact us today to learn more.