How expensive and difficult is it to become a B Corp?

We are considering becoming a non-profit business, but have investors that are suggesting we become a B Corp instead.  

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Answers (1-10)

A B Corp is merely a designation by a third party organization that the company is socially aware and fiscally transparent. It is not a legally recognized form of organization. For filing and tax purposes there are still only LLCs, S Corps and C Corps. If you are seeking to raise money for charitable, religious or educational purposes, the only designation is a Non-Profit Corp with specific filings with the State of Texas and the IRS.

Texas authorizes a for-profit corporation to elect to be a public benefit corporation (PBC). A PBC is a domestic for-profit corporation that is intended to produce a public benefit and to operate in a responsible and sustainable manner. A PBC is required to be managed in a way that balances: 1) the shareholders' pecuniary interest, 2) the best interests of those persons materially affected by the corporation's conduct, and 3) the public benefit or benefits specified in the corporation's certificate of formation. An existing for-profit corporation may file a certificate of amendment to elect to become a public benefit corporation. 

The only "Type B" corporations in Texas are economic development corporations (EDCs) created by cities. Type B EDCs may pay for land, buildings, equipment, facilities, targeted infrastructure and improvements for: professional and amateur sports and athletic facilities, tourism and entertainment facilities, convention facilities and public parks; related store restaurant, concession, parking and transportation facilities; related street, water and sewer facilities; and affordable housing. 

To promote and develop new and expanded business enterprises that create or retain primary jobs, a Type B EDC may fund public safety facilities; recycling facilities; streets, roads, drainage and related improvements; demolition of existing structures; general municipally-owned improvements; and maintenance and operating costs associated with projects.

Type B EDCs also may seek voter approval to spend Type B sales tax funds for a water supply, water conservation program or cleanup of contaminated property. 

Type B EDCs may be used for any project eligible under Type A EDC rules.

Are you a for-profit company presently? If yes, why consider the NP route? The B Corporation is a certification, not necessarily a legal entity as we know S & C corporations. The B designation commits you to a number of guidelines/rules on social and environmental activism. I would strongly recommend you go to google and research this designation. The costs associated with the commitments may be a concern. 

I have not worked with B corporations. However, since a C corp can be converted to a B corp with just an amendment, I would assume the costs are similar. However, the b corporation does require certain statements regarding the public good, which, if you hire an attorney, might be an extra fee.

As with most business decisions, the cost is a part of the final decision, but it should not be the driving force to change direction.  Costs should be used only to push the needle slightly for or against a proposed change.  When you start with cost in your decision-making process, your other decisions are always overshadowed by cost as the "perceived priority factor."

Decide what business goals you are trying to achieve, then determine is a for-profit model is better or worse than a non-profit model to achieve the goals, then if a non-profit model is better, you can focus on obtaining a "B" certification.

Non-profits often find it easier to qualify for grants and  donations, but for-profits may find it easier to generate revenue.

First, B Corp certification is private certification issued to for-profit corporations by B Lab.  To obtain certification, the company must first complete an online assessment which covers not only its entire operation, but measures the its positive impact over a wide area of governance, the community, the environment and the product and/or services provided.  If granted certification, the annual fee is wide ranging depending upon annual sales.

B Corp certification is quite different from forming a non-profit business.

You are at a very basic level of investigation - a "B Corp" is simply a private certification process for a for-profit corporation - not typically an alternative to a non-profit business.

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Go to  the  State of Florida  website Sunbiz,org for qualifications fees and requirements to form  a Nonprofit or S-Corp 

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