Today’s business owners have more entity options than ever before. After a period of rapid growth, during which profitability was a business’s only measure of success, the societal view of corporations has started to shift. Now, more and more consumers want to work with companies that are socially responsible, environmentally friendly, and ethical. Enter: the Certified B-Corporation.
The History Of The B-Corp
The B-Corp was developed in 2007, and since then, over 1800 companies have achieved this status. The goal of B Lab, which developed the B-Corp certification, is to establish a community of businesses that are committed to public transparency, social responsibility, environmental performance, and legal accountability. Research indicates that today’s employees want to be connected to a greater purpose through their work.
An increasing number of studies have suggested that consumers resonate well with firms that share their values, which has helped to ensure that the B-Corp is a sought-after classification that many companies who project a positive image would like to exist as. That means that a relatively large number of different organizations are applying for it at any given time.
To increase your chances of potentially meeting this classification, you’ll want to work with a business lawyer who can help to ensure your company meets this narrow definition.
What Defines A B-Corp
B Lab has identified five conditions that a company must meet to apply for B-Corporation Certification. These conditions include:
• Accountability: When making decisions, directors have to consider the impact on all of their shareholders. All decisions must be made transparently and information regarding the decision-making process has to be available for auditing.
• Performance: To receive certification, a company must get a satisfactory score on the B Impact Assessment test and recertify every two years. When companies are asked to do so, they must prove that they’re still operating within certain boundaries.
• Transparency: B-Corps are required to publish a public report detailing their social and environmental performance. This must be done on a regular basis to help illustrate that they are sincere in their commitment to meeting certain standards and goals while maintaining a high degree of honesty.
• Availability: Companies of all entity types and in any country or state may seek B-Corp status. Any firm that operates as a B-Corp could, theoretically, serve any particular industry or segment that they elected to. This allows firms in nearly any sector to earn this status if they meet the requirements. Likewise, it normally does not normally matter what goods or services are vended by a particular organization if they wish to apply and pledge to meet these requirements at all times.
• Cost: Cost of certification is determined by the revenue level of the company. Smaller companies with low annual revenue targets are potentially entitled to lower certification costs as a result of their position in their respective industries. Conversely, some larger firms may have to pay a slightly elevated fee. This is because of their size and potentially established position in their respective industries.
B Corp Status
A company could potentially meet these requirements initially. Then it may lose its footing in the future due to some business decisions down the road. This would cause said company to eventually drop its status as a B-Corp.
In this case, the company would no longer be permitted to take advantage of any benefits that it had received from being in such a position. That’s a situation that many managers would like to avoid.
You may wish to continue working with a legal counsel. Then you ensure that you’re meeting the guidelines you need to in order to hold onto this certification.
Even companies that are fully registered as B-Corps still need to be mindful of all other business landscape aspects. They’ll still want to consider trademark issues and take additional steps to protect their intellectual property. This is especially important for any company that intends on providing consumer goods to end buyers.
Many firms have used their B-Corp status to appeal to buyers of lower carbon and organic food products. As a result, there has been an increase in the number of organizations taking the opportunity to register their IP marks.
Since B-Corp companies aren’t treated any differently in this respect, you’ll still want to work with the same kind of attorneys you would to manage any other aspect of your business experience.
Benefits Of B-Corporation Status
If you are considering whether or not B-Corporation Certification is the right choice for your company, look at the benefits. In this economic climate, attracting the right talent is crucial for companies striving to reach the next level. B-Corp status does not mean sacrificing profit for a greater good; it means making money without sacrificing your values. Job seekers are likely to look at a company’s values and seek employers that match their own principles.
B-Corporation Certification can also help companies reach new clients and edge out their competitors. If clients are comparing two similar options, small distinctions make a big difference. For many clients that are working toward sustainable choices and lifestyles, B-Corps may be a better choice.
Evaluate Your Bottom Line Options With Trembly Law
At Trembly Law, we want to make sure that everyone knows all of their possible options before starting a business. We invite everyone to learn more about this unique opportunity.
Wondering if you want to make your business a B-Corp? Looking for other ways to make your business stand out? Work with a business lawyer to make sure you are doing everything you can to help your company grow. Reach out to Trembly Law to get started.