The Public Benefit Corporation, or PBC, is a newer type of entity that’s gotten a lot of buzz in the last few years. The PBC differs from a standard corporation in that it exists to serve a purpose beyond maximization of profits for its shareholders. This can be a good option for civic-minded entrepreneurs, or for companies that want to serve the public without going the nonprofit route.
The PBC is a very new structure, and many states have yet to recognize it as a legal entity. Maryland passed the first law recognizing PBCs in 2010, and other states have since followed. One high-profile PBC is Method, a manufacturer of soap and other cleaners, which focuses on environmental sustanability when producing its products. A standard c-corporation would be limited in pursuing this goal, since the corporation’s highest duty is to produce maximum return for its shareholders.
If you want to run a business that makes money and does good for society, a PBC may be a good option. Keep in mind that, since the PBC is such a new structure, many states don’t yet provide for formation of a public benefit corporation within their borders.
According to benefitcorp.net, the following 31 states have passed legislation allowing the formation of PBCs:
An additional 7 states are in the process of trying to pass such legislation: