This year, I started a series on my company’s blog where I interviewed proud owners of B Corporations. If you’re not familiar with the entity, B Corps are for-profit companies. They are certified by B Lab and encourage entrepreneurs to give back to business and society. They must also meet standards of social and environmental performance, accountability, and transparency in order to be a part of the B Corp community.
All throughout 2017, these small business owners shared why they believe that B Corps are the future of business. Some said that by being a B Corp, they were helping to inspire the next generation to keep paying it forward and make a difference. Others noted that not everyone runs a business just to make money, but rather to build something that leaves the world in a better place. The growing realization was that it’s impossible to expect everyone else to solve the world’s problems. What matters are our own everyday actions and how entrepreneurs take action to “B the Change.”
Warming up to the idea of forming a B Corp in 2018? Here’s a look at even more benefits this business structure offers entrepreneurs.
The certification process is not meant to be intimidating
Incorporating a business as an LLC or Corporation is a process that requires time, energy, and paperwork. B Corporations operate a bit differently. The B Corp entity is a bit of a hybrid between a standard corporation and nonprofit. Before you can file as one, you must first meet performance requirements that show how you will commit to benefitting the public. Otherwise, the legal structure won’t be able to stay in compliance.
The one thing nobody tells you about this formation? It only takes three steps to become a B Corp.
- Meet performance requirement. This means completing the B Impact Assessment with a minimum of 80 out of 200 points required as a passing grade.
- Meet legal requirement. This works to legally protect your mission and bake sustainability into the DNA of your company as it grows. There is a process before certification and after — here’s what to expect in the “before” part.
- In order to meet the legal certification requirement for your state of incorporation and corporate structure, decide if it’s necessary to adopt a benefit corporation status or amend governing documents.
- For legal changes made, communicate with board members and legal counsel about how this shift is useful and if there will be any implications for adopting said changes. If you struggle to answer questions, B Corporation put together a helpful FAQ sheet for investors and directors of potential B Corps to download and review.
After certification, everything becomes more streamlined. Entrepreneurs will need to obtain the board approval of their planned amendment as well as shareholder approval of the board-approved amendment. If a corporation, it is recommended that amended articles are filed with your Secretary of State within one year.
- Make it official! You’re almost done — just sign the B Corp Declaration of Interdependence and Term Sheet.
You’re surrounded by a like-minded community
B Corps may be a global force disrupting the industry for social good, but sometimes it can feel like your business is all alone. Where’s your B Corp tribe at, anyway?
If you’re ever curious about the B Corps in your city or state, you can find a B Corp through B Corporation’s search engine tool. There is also a special event called the B Corp Champions Retreat which encourages attendees to come together and meet with those in the B Corp community. Held every year, this getaway celebrates the movement’s growth and success of those that have made significant strides. The retreat also goes global too, hosted by a different city every year from Toronto to Philadelphia.
B Corps attract talented employees
As reported by the 2017 American Express OPEN Small Business Monitor, one of the biggest challenges small business owners faced this year was finding and hiring talent.
Here’s where B Corps get to flex their social good muscle to draw in experienced team members. According to the Harvard Business Review, millennials seek out work that connects to a larger purpose. This same age group makes up 50% of the existing workforce. Enter the certified B Corporation, which is transparent and driven by its mission and values to do good, all of which attracts talent to reach out, connect, and apply for jobs there.
For the business, this gives them talented employees all passionate about the company and for employees it provides an invaluable opportunity to make a difference within their career. It’s a win-win for everyone involved.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.