Benefit Corporations:

• Have the same general advantages applicable to corporations;
• Highlight and brand an organization as having a social or charitable purpose other than the maximization of profits;
• May provide access to third parties, consumers, strategic partners, investors and others whose interests are aligned with the organization’s social or charitable purposes; 
• Third-party certifications may provide some certainty to potential investors and strategic partners that the corporation is pursuing a social purpose;

BUT:

• The same general disadvantages applicable to corporations also apply to benefit corporations;
• This is a relatively new variation of corporation and impact on capital raising is not clear yet;
• There is an extensive variation among state law with differences outweighing similarities resulting in a lack of standard model across states;
• The lack of integration in many states between benefit corporation statutes and general corporation statutes results in ambiguity or potential conflicts;
• Unrelated third parties may be able to bring claims in some states to enforce benefit corporation’s mission;
• There is ambiguity in state statutes regarding duties of “benefit” director and discretion of board of directors and management to weigh different goals;
• There might be confusion with certain third-party certification standards – such as the “B Corporation” from B Lab;
• Third parties cannot easily identify benefit corporations as there is no requirement to explicitly designate “benefit corporation” in the corporate name;
• Third-party certification requirements provide significant power and authority to third-party providers of such certifications;
• Extensive certification process and reporting requirements may be expensive and time consuming;
• It may be difficult for a corporation with numerous shareholders to transition to/from status as a benefit corporation.

Download guidance on setting up a Benefit Corporation 

OR 

Social Purpose Corporation 

OR

Delaware Public Benefit Corporation