What Is a Public Benefit Corporation?

NO GOOD DEED GOES UNEVALUATED: Remember when Laureate Education announced it was becoming a public benefit corporation as it went public again? Others are following suit, though not all are going public. Kickstarter has become a public benefit corporation but intends to stay privately held. Laureate, on the other hand, is hoping its shareholders will buy into its mission of "Here for good." Towards the goal of demonstrating its altruistic intentions, Laureate has contracted B Lab for assessment. B Lab evaluates corporations' impacts and progress towards their missions, certifying them if they meet social and environmental standards.

Public benefit corporations and B Corps, however, are not the same. Benefit corporations are legally incorporated, while B Corps volunteer for certification by B Lab. The two can overlap, but public benefit corporations incorporate around a mission, whereas B Corps are evaluated by B Lab's independent standards. Becoming a B Corps provides no legal protections, whereas incorporating as a public benefit corporation creates shelters from shareholder litigation.

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