– SP Corp. and B Corp. allow corporations to make a profit while also pursuing socially conscious goals.
– These structures provide liability protection for shareholders, officers, and directors.
– Companies can take actions that may not directly benefit their bottom line, such as donating a product for each one sold.
– SP Corp. and B Corp. may help with branding and attracting investment. 1. Social Purpose Corporations and Benefit Corporations allow companies to prioritize social or environmental missions alongside making profits.
2. They provide legal protection for officers and directors taking actions to fulfill the company’s social mission.
3. These structures reinforce the company’s goals and require tracking and reporting on the achievement of its social mission. 1. Social Purpose Corporations (SP Corp.) and Benefit Corporations (B Corp.) combine profit with philanthropic purpose, making it easier to attract capital and bank loans.
2. Consumers may be more willing to purchase products from SP Corp. or B Corp because of their commitment to social purpose.
3. Florida amended its Business Corporations Act to include SP Corp and B Corp, joining over thirty other states in recognizing these alternative corporate structures. – The SP Corp. may identify specific public benefits in its articles of incorporation, such as helping underserved communities and promoting economic opportunities.
– Directors and officers of a SP Corp. must consider the impact of their actions on shareholders and the company’s social purpose.
– The company is required to appoint a benefits director/officer and prepare an annual report on its pursuit of public benefit. 1. Benefit enforcement proceedings can be brought against a corporation, its directors, or officers by the corporation, directors, or stockholders owning at least 5% of the company if the corporation fails to achieve its goals or consider factors other than profit.
2. The benefit enforcement proceeding is designed to compel the company to act and is not for monetary damages, and there is no case law in Florida dealing with these types of proceedings.
3. B Corps. are established under Part III of the Act and have specific requirements for companies desiring to register as a B Corp.
4. A B Corp.’s articles of incorporation can identify a general public benefit and specific public benefit, and the definition of a “general public benefit” is a “material, positive effect on society and the environment, taken as a whole, as assessed using a third-party standard by which is attributable to the business and operations of a benefit corporation.”
5. The specific public benefits of a B Corp can include helping low-income or underserved communities, promoting economic opportunities beyond normal job creation, restoring the environment, improving human health, and promoting the arts, sciences, or advancement of knowledge. 1. B Corps are required to consider the impact of their actions on various stakeholders and the environment, as well as publish a comprehensive annual report using a third-party standard.
2. B Corps, like SP Corps, may be sued to enforce the announced benefits of the company, but this is not for monetary damages.
3. If a business aims to achieve a social goal, a SP Corp. or B Corp. structure may be suitable, as it helps the company to measure and manage their actions in compliance with their goals.
https://www.jimersonfirm.com/blog/2019/08/florida-social-and-benefit-corporations/
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