Author(s): Elisabeth J. Teal, A. Rebekah Teal
The Benefit Corporation is a newer legal form of organization that is available in over thirty U.S. states. In the states where it is approved, a firm may elect to incorporate as a traditional corporation or they may elect to form as a Benefit Corporation. Firms incorporating under Benefit Corporation status seek to pursue profits while protecting the interests of society as a whole and while also protecting the environment. Thus, Benefit Corporations seek to operate under a “triple bottom line” model, which is described as including the considerations of profit, people and planet in corporate decision making. In this paper we provide a brief literature review of the issues surrounding this type of legislation followed by a description of what a Benefit Corporation is and how it fits within the existing frameworks for legal forms of organization available to businesses in the United States. We discuss the status of existing Benefit Corporation laws and describe what is different about Benefit Corporations in terms of corporate purpose, corporate governance, and corporate transparency and accountability. With this paper we seek to inform and provide clarity so that new theories may be developed and new research studies established to determine whether this new corporate form of organization is beneficial, both for those who wish to establish socially responsible for-profit enterprises and also the stakeholders of such enterprises.