Legal Advantages and Disadvantages of Forming a Benefit Corporation

A new breed of “hybrid corporations” has exploded on the scene, which challenges the traditional view of corporations as profit-maximizing entities whose primary, and perhaps sole, mission is increasing shareholder value.

Also called L3Cs (i.e., low profit, limited liability corporations) or B (Benefit) Corporations, these household names like Burt’s Bees, Ben and Jerry’s, Seventh Generation, Sun Ovens, PAX Scientific, and Maggie’s Organics challenge traditional corporations to seek positive social/environmental change while creating mutually beneficial relationships with stakeholders. Yet, the decision of whether to adopt this corporate form is challenging, and the tangible costs and benefits of doing so are still unclear to many practitioners.

This course seeks to shed light on the salient considerations in advising corporate clients on whether to choose this corporate form and what the implications, both internally and externally, of doing so might entail. Regardless of the corporate form selected, however, with a direct-action approach, successful corporations will anticipate these changes and fluidly adjust business practices to be more transparent and responsible in their global supply chain management to ensure ethical sourcing and long-term benefits to global communities.