B Corporations and Maryland Law
Some people, especially when they are in Internet troll mode, seem to think that businesses are the only way to accomplish anything, while others seem to take the attitude that businesses are the root of all evil. When you ask enough thoughtful questions to members of the latter group, though, they are usually willing to admit that some businesses are more detrimental to society and to our planet. Business owners know this, and some of them build social responsibility into their brand identity. Many of the brands you can buy at Whole Foods pride themselves on their environmentally sustainable food production practices. Anyone can say anything in their advertising content; you have to tell some whoppers before you have to worry about any legal challenges for false advertising. Wouldn’t it be nice if businesses could officially put their money where their marketing strategy is? For example, if the C in C corporation stands for “climate change,” isn’t there some other entity type that is less insidious? In some states, including Maryland, there is. For advice about establishing a B corporation in Maryland, contact a Washington, D.C. small business lawyer.
How Beneficial Does a B Corporation Have to Be to Get the B Designation?
You can register your company as a B corporation if its purpose is to provide benefit to society in ways other than the usually positive outcomes of successful businesses, such as creating jobs and providing investment income for shareholders. Beyond this, the definition of “benefit” is sufficiently broad that businesses in many different sectors can qualify for the B corporation entity type. For example, you can register as a B corporation if a portion of the profits of your business go to nonprofit purposes, such as environmental conservation or providing free services to the public. Anything that improves human health, reduces poverty in ways other than simple employment income or distributing profits to shareholders, or protects the environment can make your company eligible for B corporation status.
Requirements for Maryland B Corporations
In order to incorporate your business as a B corporation, you must state its beneficial activities in the paperwork you file with the state to establish your business. Changing to B corporation from another entity type is easier than changing to other business structures; you must simply amend your operating agreement or articles of incorporation. You must also distribute an annual report to shareholders that includes not only your company’s profits and losses, but also the progress it has made toward its benefit goals. In other words, B corporations are accountable to the state and to shareholders about the good that they do. The company’s philanthropic or planet-friendly work is one of the measures of its performance.
Contact Tobin O’Connor Ewing About Establishing a B Corporation
A Washington, D.C. small business attorney can help you decide whether B corporation status is the best way to enable your business venture to be profitable and also to benefit the public. Contact Tobin, O’Connor, and Ewing in Washington, D.C. or call 202-362-5900.
Source:
peoples-law.org/how-form-benefit-corporation-maryland