What is a B corporation?
A benefit corporation is a new type of entity created by the Wisconsin legislature to allow for-profit businesses to adopt a corporate structure that requires consideration of the public good as well as profits. Accordingly, the best interests of a benefit corporation (sometimes called a B corporation) extend beyond the corporation’s bottom line. A benefit corporation requires officers and directors to evaluate the effects of action or inaction on the public, the corporation’s community, and the local or global environment.
Must benefit corporations sacrifice profit for the greater good? Is a benefit corporation a non-profit?
No, benefit corporation officers and directors must also consider how its choices affect shareholders, employees, customers, and the entity’s short and long-term interests.
What are the requirements for a B corporation?
A benefit corporation shall have a purpose that creates a “general public benefit,” meaning “a material positive impact on society and the environment.” Benefit corporations must also:
- Designate one director as a “benefit director” tasked with monitoring the corporation’s adherence with its public benefit mission;
- Annually evaluate the corporation’s compliance with its public benefit purpose and provide shareholders with an annual benefit statement reflecting this analysis; and
- Comply with Wis. Stat. Chapter 180, except if it conflicts with Chapter 204, the public benefit corporation statute.
Can I form a benefit LLC?
No, Chapter 204 of the Wisconsin Statutes only allows benefit corporations.
When can I form a benefit corporation in Wisconsin?
The benefit corporation statute takes effect on February 26, 2018.
Can I convert my existing Wisconsin corporation to a benefit corporation?
Yes, existing corporations may amend their articles of incorporation to add a statement that the corporation is a benefit corporation.
I might be interested. Where can I find more information?
Wisconsin statutes Chapter 204 establishes benefit corporations. You’ll find general information about B corporations here. For help analyzing whether your specific business plan or existing corporation’s mission aligns with the benefit corporation benefits and requirements, please contact us at (262) 241-8900 or email@example.com.
Stephanie, owner of Melnick & Melnick, S.C. and self-described law nerd has been practicing law for over 25 years. Stephanie loves taking a deep dive into clients’ businesses to learn what makes them tick. She also relishes a well-written (short and simple) contract and is pleased to draft and negotiate all kinds, including leases, operating agreements, and terms of service.more posts by Stephanie →