What is a B Corporation?
A “B” Corporation is an unofficial designation for socially responsible businesses. It can also be referred to as a B Corp, Benefit Corp, or B Corp Certification. The 501(c)3 nonprofit, B Lab, determines and designates B Corporations. There are over 1,000 Certified B Corps in more than 60 industries. Companies that have obtained B Corp designation include Etsy, Method, Seventh Generation, Ben & Jerry’s, and Patagonia.
There are many benefits associated with B Corporation status. Designation as a B Corporation can make your business more attractive to the growing number of socially conscious consumers, and consumers generally who already largely align their purchases with their values. Also, some companies offer discounted products and services to B Corp Certified businesses. For example, Intuit offers B Corporations QuickBooks for free.
In order to obtain B Corporation designation, a business has to pass rigorous standards of environmental and social performance, as well as committing to fostering open communication and transparency. The first step is completing a “B Impact Assessment.” A passing score on this assessment is 80 out of 200 points. The assessment examines the overall impact a company has on its stakeholders, and will vary depending on the company’s size, sector, and location. Afterwards, a company will have to submit supporting documentation and complete a disclosure questionnaire. Additionally, every year, ten percent of Certified B Corporations are randomly selected for an on-site review. The purpose of these random audits is to verify the accuracy of all affirmative responses in the company’s B Impact Assessment.
Once a business has met all of these requirements, it will be able to sign the B Corp Declaration of Interdependence and Term Sheet, making its status as a B Corp official.
If you have any questions about having your business designated as a B Corporation, consult with an experienced attorney. Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your real estate, business, or contract law needs.