What distinguishes a benefit corporation from a C corporation?

The distinction between a benefit corporation and a C corporation primarily revolves around purpose, accountability, and transparency. A benefit corporation is designed not only to generate profit for shareholders but also to create a positive impact on society and the environment. This dual purpose is embedded in the company's mission and business operations. Benefit corporations are held to higher standards of accountability, requiring them to consider the interests of non-financial stakeholders, such as employees, community, and the environment, in their decision-making processes.

In addition, benefit corporations must report on their social and environmental performance against a third-party standard, which enhances transparency. This stands in contrast to C corporations, which primarily focus on maximizing shareholder value and are not required to account for the broader social impacts of their operations.

Understanding these distinctions helps in grasping the evolving landscape of corporate structures, especially as more businesses aim to balance purpose with profit.