What Is a Benefit Corporation?
A benefit corporation is a for-profit business that’s made a legal commitment to more than just making money.
Unlike a traditional business structure focused mainly on financial return, a benefit corporation is built to weigh a broader group of stakeholders when making decisions for team members, customers, communities, the environment, and shareholders alike.
In other words, a benefit corporation gives purpose a place in the legal structure of the business, not just the mission statement.
What does “benefit corporation” mean?
The term trips people up because a benefit corporation is not a certification. It’s a legal business structure or status created under state law, and the specific requirements vary from state to state.
In Oregon, the state uses the term benefit company. Both corporations and LLCs can elect benefit company status by including the required language, citing Sections 1 to 11 of chapter 269, Oregon Laws 2013 in their formation or governing documents, filed with the Oregon Secretary of State. Most other states follow a similar purpose/accountability/transparency framework, with their own filing specifics.
Certification is something different. A company can become a benefit corporation or benefit company without earning B Corp certification. Conversely, a company can pursue B Corp certification without necessarily using the same legal structure in every jurisdiction.
How is a benefit corporation different from a traditional business?
Traditional corporate governance has historically emphasized shareholder interests above all. Benefit corporation legislation gives businesses a legal framework for weighing a broader set of questions when leaders make decisions:
How will this decision affect our team members?
What impact will it have on our customers?
What are the environmental consequences?
How does it affect our community?
Does this decision support the purpose we’ve committed to?
The goal isn’t to ignore profit, it’s to recognize that a healthy business can pursue profit while also creating value for people and the planet. At Benefit Corporations for Good, we call this the Triple Bottom Line: People, Planet, and Profit.
How is a benefit corporation different from a traditional business?
Traditional corporate governance has historically emphasized shareholder interests above all. Benefit corporation legislation gives businesses a legal framework for weighing a broader set of questions when leaders make decisions:
How will this decision affect our team members?
What impact will it have on our customers?
What are the environmental consequences?
How does it affect our community?
Does this decision support the purpose we’ve committed to?
The goal isn’t to ignore profit, it’s to recognize that a healthy business can pursue profit while also creating value for people and the planet. At Benefit Corporations for Good, we call this the Triple Bottom Line: People, Planet, and Profit.
Why would a business become a benefit corporation?
For many purpose-driven businesses, becoming a benefit corporation is a way to put values into practice, not just a mission statement. Legalizing that commitment helps purpose stay part of how the business is governed as it grows, changes leadership, raises capital, or changes ownership and it gives customers, team members, and investors a clearer read on what the business actually stands for.
Is a benefit corporation the same as a B Corp?
No, one of the most common points of confusion. A benefit corporation is a legal structure or status. A Certified B Corporation, or B Corp, is a business that’s earned certification from B Lab, a nonprofit organization. They’re related, but not the same thing. See our full Benefit Corporation vs. B Corp comparison.
Can a small business become a benefit corporation?
Yes, benefit corporation laws aren’t limited to large companies. If anything, the model fits small businesses especially well, since many already operate with a strong sense of purpose. Becoming a benefit corporation gives that purpose a legal framework and a more formal, accountable shape.
For small businesses that want to demonstrate they actually live their values, third-party certification adds another layer of accountability. That’s where BCFG comes in.
Where does BCFG fit?
Benefit Corporations for Good is a third-party certification standard for small, purpose-driven businesses one of four recognized by the Oregon Secretary of State, and the only one based in Oregon. We’ve certified 100+ businesses across 13 states and one Canadian province.
BCFG doesn’t create the legal benefit corporation or benefit company status. We independently evaluate businesses against eight standards of responsible business practice a 60-question assessment, and an interview once you clear 70%. Certified members also join our in-person and virtual Happy Hours for Good to keep learning from each other.
The first benefit isn’t profit. It’s purpose with proof.
We believe certification should be meaningful enough to matter and accessible enough for real small businesses to pursue which is why it costs $299 for businesses with five or fewer full-time employees.
Ready to learn more?
Start with our guide to How to Become a Benefit Corporation, or explore Benefit Corporation for Small Business.