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What does B Corporation mean, and how can it protect your business?

bcorp ethical business

Opening a business up to shareholders comes with a lot of opportunity. Investors can accelerate the growth of a company, provide capital for expansion, and lead to a more robust operation.

There are some downsides to conventional corporations though. The biggest of these is that the shareholders become responsible for the future of the company, at the very least to a significant degree. The courts will side with decisions that drive profits for shareholders, even if it isn’t what is best for your company in the long run.

What Does B Corporation Mean?

B Corporations are called Benefit Corporations, which basically means that while they operate for profit like any other corporation, they also adhere to a stronger sense of environmental and global impact.

In short, B-Corps are subject to oversight for every aspect of their business model, from how they treat their employees to their carbon emissions to their interactions with the local and global communities.

Becoming a B-Corp is a little more complex than checking a box on a tax form. Corporations are first encouraged to pass an online test for their company with a score above 80%, and from there are subject to inspections and fees associated with being “part of the club.”

In the end, benefit means public benefit. This isn’t a charity. It’s a business that models itself around community, accountability, and transparency.

Instead of directors making decisions in the best interests of shareholders, they must also consider the best interests of employees, suppliers, customers, community, and the environment.

Basically, it means that your company isn’t subject to self-destructive decisions that affect your status in the community and your commitment to the planet.

How to Become a Certified B Corp

First up, make sure that you operate in a state that recognizes this type of corporation. While it may soon spread nationally, the following is a list of the US states that recognize B Corps at the time of this writing (May 2021). Please visit benefitcorp.net for more information about the status of international legislation.

New HampshireNew JerseyNew Mexico
New YorkOklahomaOregon
PennsylvaniaRhode IslandRhode Island
VirginiaWashington, DCWest Virginia
List of the US states that legally recognize bcorps (passed benefit corporation legislation)

Status of bcorp legislation in the US by state


Map of the US states that allow B Corporations

(data source: benefitcorp.net)

Secondly, consider the costs. The initial assessment includes a non-refundable $150 fee, and annual fees are $1000 or more depending on the size of the corporation.

Third, consider the benefits. Listed B Corps have the advantage of being seen as companies that operate to the highest standards currently available and in the interests of the community and the environment. Such standards are continually becoming a necessity among consumers, and the B Corporation movement gives them a criteria to judge by.

Take the online assessment and see how you stack up. Your results will show you if you need to improve some things or if you are ready for certification now. 1/3 of businesses will not pass their first go.

Once the B Corp assessors give you the green light, you will need to pay your dues and keep track of all of your activities. You are also subject to periodic inspections, especially in the first couple years, and you will need to be re-evaluated every so often to keep your status.

What Does Certified B Corporation Mean?

What is a certified B corporation, but a company who has done all they can to ensure that the future of their business will continue to have a positive impact on the population and the globe.

People know this, and they are starting to look for the label. From a marketing perspective, this is the future of corporations. Rather than being mandated by some federal law, it sets the bar for competition between responsible companies.

Being certified also allows you to diverge from the typical investor philosophy of profit over all else, and retain the legal right to do so. It means your company can’t be taken over by greedy Wall Street businessmen who are out to line their own pockets, while still retaining all the perks of being a publicly traded company.

In short, Certifying as a B Corporation will allow you to continue running your business in the best interests of the community and the environment, while having easier access to investors and shareholders.


Adding your company to the growing list of benefit corporations comes with a few trade-offs. It can be difficult to qualify and comes with some recurring costs.

However, for companies ready to shoot for an IPO or already established corporations, the costs may be outweighed by the many benefits.

A boost to customer relations goes without saying, and you can ensure that the future of your company is governed by more than simple profits. By becoming a B Corp, you are making a lasting commitment to the environment and your community, and ensuring that it doesn’t turn into one of those nasty corporations that goes under because of the exploits of Wall Street.

The ultimate decision depends on how your company is currently run and what changes will need to be made to qualify. A more sustainable environment for your company to thrive in could be a potential bonus down the road as well.

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