You can be a social force for good and still earn a profit when you utilize a new entity structure called a Benefit Corporation. A Benefit Corporation is a hybrid between a for profit company and non-profit structure.
"A Benefit Corporation is NOT a Non-Profit"
The Benefit Corporation allows for both fiscal and social responsibility, while still striving to generate a profit for its investors.
When a business is formed as a Benefit Corporation they must designate how they will benefit society via heath, low-income individuals, communities, the arts, science or academic research.
A Benefit Corporation's primary role is to generate a positive financial return for shareholders while providing a positive impact on society.
Benefit Corporations were first allowed in Maryland, and since that time, more than 20 states have enacted regulations that allow for Benefit Corporations, with more states to follow.
A Benefit Corporation is owned by its shareholders. Shareholders can be individuals or other entities such as another Corporation, Trust or a Limited Liability Company. Although a Corporation usually has more than one owner, it is possible for only one individual to create and own 100 percent of the Corporation.
Benefit Corporations are taxed like a regular Corporation or S-Corporation. They don't receive any additional tax incentives for being a Benefit Corporation. Benefit Corporations will still be responsible for the same tax filings and laws as regular Corporations.
Forming a Benefit Corporation is similar to forming a regular C-Corporation. When you file the Articles of Incorporation at the Secretary of State, you must state that the company is being formed as a Benefit Corporation and state how the company will benefit society.
Benefit Corporations provide the same level of liability protection as a regular Corporation.
If you would like to form a Benefit Corporation, please call 1-800-648-0966. We will complete a simple questionnaire over the phone to make sure everything is filed correctly with the Secretary of State.
As of this time not every state allows for Benefit Corporations, but they are quickly being adopted by every state.