Benefit Corporations - Corporations with a Social Conscience


Corporations are generally associated with maximizing profits rather than making societal benefit a high priority. Well think again. An emerging corporate structure called the benefit corporation is a corporation with a social conscience. A benefit corporation is required by law not only to create profits for shareholders but also to positively impact society. This social benefit mission must be incorporated into the benefit corporation's entire being, from the Articles of Incorporation to its directors' decision-making.

A benefit corporation is a for-profit entity that, like all for-profits, has a goal of generating profit for its shareholders. In addition to that goal, however, the benefit corporation must also articulate a clear business purpose that includes a commitment to effect a material social or environmental benefit. A benefit corporation's directors still carry the fiduciary duty to act in the best interest of the corporation, but unlike the traditional for-profit corporation, the directors must also consider the impact their decisions will have on stakeholders, which include shareholders, employees, customers, suppliers, the community, and the environment.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Gammon & Grange, P.C. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.