The “B” stands for Benefit Corporations. The new B Corporation will become effective in Wisconsin on February 26, 2018 under 2017 Wisconsin Act 77. The B Corporation is a hybrid of a “for-profit” and a “nonprofit” corporation. B Corporations are allowed to seek profits while still providing benefits to societies.
B Corporations must have a purpose for creating a general public benefit. General public benefit means “a material positive impact on society and the environment by the operation of a benefit corporation taken as a whole, through activities that promote some combination of specific public benefits” as required under Wis. Stats. 204.
Under Wis. Stat. 204 (7) a specific public benefit includes:
(a) Providing low-income or underserved individuals or communities with beneficial products or services.
(b) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business.
(c) Preserving the environment.
(d) Improving human health.
(e) Promoting the arts, sciences, or advancement of knowledge.
(f) Increasing the flow of capital to entities with public benefit purpose.
(g) The accomplishment of any other particular benefit for society or the environment.
The term “triple bottom line” has been associated with the B Corporations that means their approach is: profits, people, and planet.
Some of the benefit of a B Corporations is that the corporation may protect their social goals and not just focus on what the corporation must do for-profit. This will allow the companies to be taxes and protected as a regular corporation, but also allow the company to be held to a higher standard on social issues. Some social issues or goals may be to work with environmentally responsible suppliers or hire only homeless people or someone with a criminal background. Other goals might be to donate a percentage of their profits to charities or allow workers to donate their time while still being paid their regular salary.
Although B Corporations have been around for over 10 years, the total benefit of these hybrid corporations have just begun to show in society and are sure to grow overtime. Many consumers like the thought of buying from companies who are impacting the public in positive ways and given the choice will choose the B Corporation over a regular corporation.