B Corporations, An Alternative for Socially Conscious Entrepreneurs

Illustration for article titled B Corporations, An Alternative for Socially Conscious Entrepreneurs

Entrepreneurs who wish to start a corporation that is strictly for profit may register either a C. Corp or an S. Corp. Should they choose not to register as a corporation they have the option to function as a partnership or limited liability company. Until recently, companies that wished to operate for a public benefit were limited to nonprofit organizations under the 501(c)(3) exemption. Increasingly, however, companies are becoming a hybrid of for profit entities that offer some tangible public benefit. For these companies, some states offer what is called the Benefit Corporation or B-Corp. B-Corps have been around since 2010 when Maryland became the first state to pass B-Corp legislation.


While relatively young, B-Corps are more popular than you might think and include many well-known businesses such as Patagonia and Warby Parker. These entities bridge the gap between for profit companies that may sometimes be forced to forego certain social initiatives in favor of increasing profits and nonprofit companies, which are often restricted in their ability to raise capital when they need to grow. For entrepreneurs who want to do both, a B-Corp is an option worth considering.

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