For a long time, when someone wanted to start a business and work for themselves, they had to decide whether they wanted their primary motive to be making money or doing charitable work. Most companies were set up as a corporation, LLC, or even sole proprietorship with the main goal of being profitable; in fact, business owners have a fiduciary duty of looking out for the bottom line.
In recent years, however, many states have realized the often-significant overlap in these two motives. Thus, the B-Corporation, or Benefit Corporation, was created. Georgia is one of the latest states to adopt this new designation, which allows a company to balance its driving motives between profits and societal benefit.
Interested Parties of the Corporation
One of the first things to keep in mind for your B-Corp is that you will need to consider the interests of multiple parties. While a corporation will typically put its stakeholders (employees) and stockholders first, a B-Corp also needs to weigh the needs of society as a whole. This often means making decisions that may not strictly be the best for the bottom line but will help to improve the overall public good. Of course, in this socially conscious era, putting the public good is often advantageous for the bottom line of your company in the long run.
Requirements of a B-Corp
Incorporating as a B-Corp in Georgia requires attention to a few unique factors. The biggest thing to take note of is that it is necessary to state specifically how your B-Corp will be generating a general public benefit of some type. The benefit can be any number of things, but some common examples include improving human health, increasing economic opportunity (especially for underserved communities), helping improve or restore the environment, or advancing the arts.
In addition, the B-Corporation will need to have a registered agent whose main role is to help guide the company in ways that will help keep it focused on the stated public benefit. While this agent does not have full control over all decisions made by the company, they will help to ensure that the public good is always an important factor in how the company operates.
Should Your Business Operate as a B-Corp?
When it comes to operating a business, exclusively chasing profits is far from the only interest for contemporary entrepreneurs. Instead, companies can also focus on creating value, which comes in many different forms. This is why B-Corps were originally created and why they are becoming increasingly popular. If your company might benefit from this classification, contact Sage Business Counsel for a strategy session today.
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