These business structures first appeared in this country during the past decade. In general, “B Corps” are created “to redefine success in business.” They are required to “meet rigorous social and environmental performance, accountability, and transparency.” Although they’re still not very common in America, they’re spreading throughout the world. In fact, “there is a growing community of more than 1,000 Certified B Corps from over 33 countries and over 60 industries . . .”
When you think about it, all creative business managers should embrace principles that have a positive effect on their workers, while improving the local culture and environment. If these basic principles sound attractive and logical to you, you may want to start one – as opposed to the more “traditional” ones that often only put profits up on a high pedestal.
Other Ways that “B Corps” Differ from More Traditional Ones
You must be able to produce documented efforts to support local causes while championing your company's own products and services. As one website dedicated to this type of business structure puts it, “B Corps create higher quality jobs and improve the quality of life in communities.” While government and non-profits’ efforts are still needed to effect certain types of change in the world, they often can’t work as efficiently as many B Corps. This same source further states that “Business, the most powerful man-made force on the planet, must create value for society, not just shareholders.”
How Many States in America Now Formally Recognize B-Corporations?
Although Georgia has yet to formally draft legislation supporting “B Corporations,” other states have including: Maryland, Hawaii, California, New York, Vermont, Virginia, and New Jersey.
Those who favor this new business model also point out that B Corporations make every effort to provide precise information as to how all of their transactions are conducted.
Critics of This Type of Business Entity
Their will always be individuals who put money, greed, or profits above all other pursuits. These are often the same people who thrive upon garnering power and maintaining a high personal profile – as opposed to pursuing what's best for its workers and the surrounding community.
However, some critics are understandably concerned that potential investors may be afraid that these high-minded principles could wind up costing them the highest profits available. They also believe that very strong bylaws would have to be drawn up in order to increase the chances that all funds would be properly handled while seeking the greater societal good.
Odds are, given the historical business savvy of several of the states that are currently embracing this new approach, B Corps will eventually catch on all around this country --especially if the shareholders’ rights are clearly defined and regularly honored. Also, since the shareholders all of “B Corps” are often their investors/owners -- sufficient management rights and regular oversight should be fairly easy to ensure.
To obtain help with handling all of your Georgia business planning needs, please contact Shane Smith Law today. You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.