Benefit Corporations | Flexible Purpose Corporations

Although, stakeholder value is supposed to be built into the modern financial system, by allowing market forces to punish companies who are harmful in their pursuit of profits, the time delay in the spread of information, legal requirements and the lack of transparency often means that the market forces are not able to deliver this punishment. Recently, two new forms of corporations have come up that are aimed towards corporations looking to marry profit and purpose: Benefit Corporations and Flexible Purpose Corporations. Ingrained in these two business structures are the concept of stakeholders (as compared to shareholders) and transparency.

Benefit corporations look not only to pursue shareholder wealth, but also pursue other stakeholder value. By changing the legal purpose of the company, decisions taken to improve the environment, suppliers, customers and employees are shielded from lawsuits. The new status also asks for far greater transparency and accountability.

The Flexible Purpose Corporation allows the company to pursue a specific mission beyond profit maximization for shareholders. This can be anything from improving communities through running a soup kitchen to reducing environmental impact by going solar. This form of structure also asks for greater transparency and accountability.

We can help you decide if this is the way for you to go and guide you through the legal requirements to become a Benefit Corporation or a Flexible Purpose Corporation. Once this status is achieved, we can also help you design projects to achieve your purpose, and deliver real stakeholder value.