Understand Legal

The B Corporation legal framework bakes your values into the DNA of the company so they can better survive new management, new investors or even new ownership. This legal roadmap includes a step-by-step guide through this process.

The Legal Vision

Current corporate structures make it difficult for good businesses to consider stakeholder interests-those of their community, employees, and environment. Because they are legally required to maximize shareholder value, profitable, high-impact businesses find it difficult to scale and create liquidity without compromising their mission.  

The B Corporation legal framework specifically expands the responsibilities of the corporation to include these stakeholder interests.  By redefining the legal purpose of the company this framework makes it easier for good businesses to make decisions that support their social or environmental missions.  The framework also allows them to attract mission-aligned capital and maintain mission as they grow, scale, and even plan succession.  We believe that by creating B Corporations within existing corporate law we are providing a market-driven solution today for good businesses.

The Bare Bones

Objective: Expand the responsibilities of the corporation to include the interests of employees, consumers, the community, and the environment.

A. Give legal permission and protection to officers and directors to consider all stakeholders, not just shareholders

B. Create additional rights for shareholders to hold directors and officers accountable to consider the interests of employees, consumers, the community, and the environment, while also serving the best interests of shareholders.

C. Limit these expanded rights to shareholders exclusively; non-shareholders are not empowered with a new right of action.

Process

A. Amend your governing documents (e.g., Articles of Incorporation, Membership Agreement, Partnership Agreement) to redefine the best interests of the corporation to include the consideration of employees, consumers, the community and the environment.

B. Obtain board / governing body approval of your amended governing documents

C. Obtain shareholder / member / partner approval, requiring a majority / super-majority vote, depending on your state of incorporation

D. File your amended articles with the Secretary of State

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