Benefit Corporation vs B Corp

This commitment to stakeholders needs to be included in company’s legal organizing documents.

Up until just a few years ago, there was no specific corporate form for a company that wanted to legally consider the impact of its activities on all stakeholders over the profits of its shareholders. Now in many states, there is.

However, this has caused confusion about Benefit Corporation vs B Corp. Are they the same thing? If not, what are the differences?

No, they are not the same thing.

Here’s the difference:

What is a B Corp?

A B Corp earns a certification from B Lab by scoring a minimum of 80 points on the B Impact Assessment.

What is a Benefit Corporation?

A Benefit Corporation adopts a corporate form that is legally recognized. This is similar to a C Corporation or S Corporation  with the key difference being the consideration of all stakeholders.

It can get confusing when you consider the following:

• A company can be a Benefit Corporation but not a Certified B Corp if they use the Benefit Corporation structure but have not gone through the certification process.
• A company can be a Certified B Corp but not a Benefit Corporation if they got certified but don’t use the Benefit Corporation structure, either because it is not legally available in their state or because they are not incorporated (e.g., they’re a sole proprietor).
• A company can be both a Certified B Corp and a Benefit Corporation if they went through the certification and changed their corporate status.

Since I’m not an attorney, I reached out to one to get more information about the legal requirements. This separate post goes into more detail about becoming a Benefit Corporation.