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What is a B Corp?
A certified B Corp is a for-profit corporation that has been recognized for their commitment to business practices that promote positive environmental and social change . Any company can apply for B Corp certification whether they are an LLC , S Corp , C Corp , Limited Partnership , or Sole Proprietorship . Companies with a B Corp Certification strive for both profit and purpose and promote positive change in their communities.
It is not easy to become a Certified B Corporation. The company must go through an intense certification process that demonstrates the business meets the highest levels of standards for social and environmental performance. If a company meets these standards, they are certified by B Lab , a global non-profit organization.
The shareholders in a B Corp play an especially significant role in maintaining a company’s B Corp status. Shareholders are not only responsible for keeping a B Corp on track financially, but they also hold the business accountable for how successfully the company is benefiting people and the environment.
Some areas in which company standards are evaluated include:
- Balance of profit and purpose
- Transparency regarding supply chains, ingredients, and labor
- Hiring practices
- Sustainability and environmental impact
- Legal accountability
Currently, there are over 4,000 certified B Corps in 77 different countries . These companies are designated by a B Corp logo so consumes know that the company they are doing business with is meeting the highest standards in business practices.
For more information about B Corporation Certification, click here.
Purpose of a B Corp
The main purpose of a B Corporation is to promote social and environmental change through positive business practices. B Corps work to reduce inequality, lower poverty levels, create more sustainability for our environment, and build stronger communities.
Certified B Corporations are legally required to consider the impacts of their company on those around them like:
- The community in which they operate
- The environment
B Corporations operate with this “ Declaration of Interdependence ” in mind:
“As B Corporations and leaders of this emerging economy, we believe:
- That we must be the change we seek in the world.
- That all business ought to be conducted as if people and place mattered.
- That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
- To do so requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.”
Examples of B Corp Companies
B Corporations are far more common than you may think. Some of your favorite brands that you see every day, like Ben and Jerry’s ice cream are Certified B Corps.
Here is a list of some commonly known B Corporations operating in our economy and what practices make them Certified B Corps:
- Beautycounter- Beautycounter is a clean beauty and skincare company. They advocate for safer laws governing the beauty industry and work towards more sustainability in the industry. Beautycounter is also fully transparent about their supply chains, labor, sourcing, and ingredients.
- GoMarco- This company creates protein bars that are certified organic, plant based, vegan, gluten free, kosher, and non-GMO. The regularly give back to organizations like Solutions for Change, Feeding San Diego, and Sheldrick Wildlife Trust.
- Allbirds- Allbirds is a sneaker company that uses natural, recycled, and sustainable materials.
- Saalt- This B Corp manufactures underwear and menstrual cups using clean and ethical business standards.
- Cora- Cora is another company that specializes in women’s menstrual products. They donate their products and provide education to girls in developing nations.
- Thrive Market- Thrive Market is a popular company that delivers organic food from top brands at wholesale prices. Thrive is a B Corp because they have zero waste warehouses, ethical sourcing, and compostable packaging.
- Toms- Toms is another exceedingly popular company that many people may not have realized is a Certified B Corp. Toms donates shoes to people in need through their One for One Program.
- Athelta- This company makes activewear for women and girls using sustainable fivers, water saving techniques during manufacturing, and recycled packaging.
- Patagonia- For almost 40 years Patagonia has been donating 1% of their profits from their outdoor clothing and gear to preservation and restoration efforts in our environment.
- Butcher Box- This company provides 100% grass-fed free-range chicken, beef, and pork. Their meat is antibiotic and hormone free.
Image via Pexels by Marta
Requirements for B Corps
For a corporation to achieve a Certified B Corporation designation, the company must go through a rigorous certification process. B Lab will assess the company’s impact on their employees, customers, community, and environment. From this assessment, B Lab will grade the company in a B Impact Report . To achieve a B Corporation certification, the company must score at least an 80 in every impact category. A company is required to be in business for at least one year to be eligible for the B Lab assessment.
To become a B Corp, companies must take the following steps:
Step 1: The B Impact Assessment and Disclosure Questionnaire
The BIA is a series of around 200 questions about your company. Questions will cover the company size, sector, and market. These questions will vary depending on the type of company being assessed. The BIA works as roadmap for improved performance in areas like best practice guides, goal setting, and improvement reports.
At the end of the BIA, the final questions are the Disclosure Questionnaire. Companies will be required to disclose any sensitive practices, fines, and sanctions relating to their business practices. This disclosure is kept confidential and does not affect the company's score on the BIA.
If B Lab determines that any responses need further attention, the company will be notified and required to implement remedies. In rare occasions, B Certification can be denied.
The BIA and the Disclosure Questionnaire are electronically submitted to B Lab with a $150 submission fee .
Step 2: Meet the Legal Requirements
In addition to the assessment, the corporation must legally amend their corporate bylaws to include the balance of profit and purpose that will be evaluated and upheld by shareholders.
The company must offer legal protection to directors and officers to consider the interests of all stakeholders, not just shareholders when making decisions for the company. Furthermore, shareholders must be granted additional rights to hold the directors and officers accountable for any of these decisions.
Step 3: Assessment Review
After B Lab receives the B Impact Assessment, a company owner can schedule a time to review the BIA. At this time, you can provide supporting documentation for verification of company practices and correct any unclear answers.
Step 4: Submit Additional Documents
B Lab may require additional company documents for some of the question responses.
Step 5: Background Check
In most cases, B Lab will conduct a background check of the company using public records, news sources, or searches for company names and executives.
Once this process is complete, if the company has scored 80 points or above in every category, then they are eligible for B Corporation Certification. The process however is not over. B Corps are required to update their BIA every three years and recertify as a B Corporation.
Recertification ensures that companies are maintaining the ethical business practices that earned them the B Corp Certification in the first place.
For more information about the certification process and B Lab, read this article.
Why Become a B Corp?
Becoming a Certified B Corp has many advantages for a company. In addition to the good that comes from committing to business practices that keep positive social and environmental change at the forefront of the business model, companies often experience the following benefits after receiving B Corp Certification.
- Credibility, Trust, and Loyalty- B Corporations are required to adhere to strict legal practices to maintain their B Corporation Certification. This means that any company that is B Corp Certified is legally required meet the highest levels of standards for social and environmental performance. The company must be transparent, committed to balancing profit and purpose, and working to improve the communities in which they operate. This makes any B Corp credible, and these practices create trust and loyalty from customers.
- Attractive to Investors- Very often, investors are looking for worthy causes to invest their money. A B Corp will be an attractive option for any investor who wants to ensure that their money is going to a business that aligns with their principles.
- Control Over the Company- A traditional corporation requires owners to be focused solely on profitability to appease investors and shareholders. A B Corporation, however, is required to commit to goals other than profit. This allows an owner more control over managing their company in a way that is important to them.
- Employee Recruitment- B Corps are required to be committed to better business practices all around, this includes the hiring and treatment of their employees. You will be able to staff your company with employees who not only know that the company they work for is doing good in the world, but that they will be treated well in the workplace.
- Savings Through Less Waste- One of the areas that B Corps are committed to improving is the environment. When a company pledges to be more sustainable, they will not only help the environment, they will also save money.
Read this article for more reasons why companies are becoming B Corps.
Forming a B Corp
Do you have questions about obtaining your B Corp Certification and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from corporate lawyers who specialize in Certified B Corporations.
Meet some of our B Corp Lawyers
Terry Brennan is an experienced corporate, intellectual property and emerging company transactions attorney who has been a partner at two national Wall Street law firms and a trusted corporate counsel. He focuses on providing practical, cost-efficient and creative legal advice to entrepreneurs, established enterprises and investors for business, corporate finance, intellectual property and technology transactions. As a partner at prominent law firms, Terry's work centered around financing, mergers and acquisitions, joint ventures, securities transactions, outsourcing and structuring of business entities to protect, license, finance and commercialize technology, manufacturing, digital media, intellectual property, entertainment and financial assets. As the General Counsel of IBAX Healthcare Systems, Terry was responsible for all legal and related business matters including health information systems licensing agreements, merger and acquisitions, product development and regulatory issues, contract administration, and litigation. Terry is a graduate of the Georgetown University Law Center, where he was an Editor of the law review. He is active in a number of economic development, entrepreneurial accelerators, veterans and civic organizations in Florida and New York.
I'm a Washington-licensed lawyer specializing in trademark practice and with an extensive trademark education and academic background. I currently work with domestic and international businesses seeking trademark protection in the U.S. by conducting trademark searches, providing legal advice, submitting USPTO applications, and preparing responses to office actions. I'm passionate about trademark law and always looking forward to helping small and medium businesses promote their value by having a registered federal trademark. If you have questions or concerns about trademark/copyright/IP licensing and require legal advice, feel free to contact me so we can have a first chat.
Mr. Pomeranz serves as the principal of Pomeranz Law PLLC, a boutique law firm representing clients across myriad industries and verticals. Before founding the firm, Mr. Pomeranz served as Senior Vice President, Legal & Compliance and General Counsel of Mortgage Connect, LP in 2017. Mr. Pomeranz also served as Counsel, Transactions for Altisource Portfolio Solutions S.A. (NASDAQ: ASPS) beginning in 2013, and was based in the company’s C-Suite in Luxembourg City, Luxembourg. Mr. Pomeranz began his career with Mainline Information Systems, Inc. as an in-house attorney.
I have 10 years experience providing general counsel, in the form practical and timely legal advice, under strict deadlines to individuals and various business unit stakeholders, balancing commercial needs with legal concerns at large corporations and start-ups. I am skilled at reviewing, analyzing, drafting and negotiating commercial and government contracts globally for the procurement and sale of services and goods. I also help clients ensure compliance with regulations (including data privacy), laws and contractual obligations and protect, enforce and exploit intellectual property rights and support in the development of IP strategy. I am a Certified Information Privacy Professional/United States (CIPP/US) licensed by the IAPP - International Association of Privacy Professionals.
Over 15 year experience drafting, reviewing and negotiating contracts both as in-house counsel and in law firms, including my own law firm.
Rinky S. Parwani began her career practicing law in Beverly Hills, California handling high profile complex litigation and entertainment law matters. Later, her practice turned transactional to Lake Tahoe, California with a focus on business startups, trademarks, real estate resort development and government law. After leaving California, she also served as in-house counsel for a major lending corporation headquartered in Des Moines, Iowa as well as a Senior Vice President of Compliance for a fortune 500 mortgage operation in Dallas, Texas prior to opening Parwani Law, P.A. in Tampa, Florida. She has represented various sophisticated individual, government and corporate clients and counseled in a variety of litigation and corporate matters throughout her career. Ms. Parwani also has prior experience with state and federal consumer lending laws for unsecured credit cards, revolving credit, secured loans, retail credit, sales finance and mortgage loans. She also has served as a special magistrate and legal counsel for numerous Florida County Value Adjustment Boards. Her practice varies significantly from unique federal and state litigation cases to transactional matters. Born and raised in Des Moines, Iowa, Ms. Parwani worked in private accounting for several years prior to law school. Her background includes a Certified Public Accountant (CPA) certificate from Iowa (currently the license is inactive) and a Certified Management Accountant (CMA) designation (currently the designation is inactive). Ms. Parwani or the firm is currently a member of the following organizations: Hillsborough County Bar Association, American Bar Association, Tampa Bay Bankruptcy Bar Association, National Association of Consumer Bankruptcy Attorneys, and the American Immigration Lawyers Association. She is a Fellow of the American Bar Association. Ms. Parwani is a frequent volunteer for Fox Channel 13 Tampa Bay Ask-A-Lawyer. She has published an article entitled "Advising Your Client in Foreclosure" in the Stetson Law Review, Volume 41, No. 3, Spring 2012 Foreclosure Symposium Edition. She is a frequent continuing legal education speaker and has also taught bankruptcy seminars for the American Bar Association and Amstar Litigation. She was commissioned by the Governor of Kentucky as a Kentucky Colonel. In addition, she teaches Immigration Law, Bankruptcy Law and Legal Research and Writing as an adjunct faculty instructor at the Hillsborough Community College Ybor campus in the paralegal studies program.
Possesses extensive experience in the areas of civil and transactional law, as well as commercial litigation and have been in practice since 1998. I addition I have done numerous blue sky and SEC exempt stock sales, mergers, conversions from corporations to limited liability company, and asset purchases. I have worked in commercial litigation, corporate and transactional law, intellectual property and bankruptcy. In recent years I have expanded my practice to include family law, personal injury, medical malpractice, and wrongful death.