Effective December 1, 2012, business entities in Massachusetts may incorporate as benefit corporations or convert to benefit corporation status. Becoming a benefit corporation means that the company includes in their articles of incorporation a declaration of a social and/or environmental mission.
Benefit corporations are widely recognized as a “hybrid” form of organization, which allows the company the freedom to pursue profit and positive social impact. The benefit corporation legislation is surging in popularity as corporations wish to embrace social and environmental goals alongside profits. Many recognize that current legal forms of organization would undermine companies’ non-financial missions. By becoming a benefit corporation, companies can ensure stakeholders are held accountable for more than the financial bottom line and can make decisions that don’t necessarily prioritize returns without breaching fiduciary duty.
Including Massachusetts, other states that have passed the legislation are California, Hawaii, Illinois, Maryland, Louisiana, New Jersey, New York, Pennsylvania, South Carolina, Vermont, and Virginia.
Corporations in Massachusetts had the option to begin filing Articles of Organization for a benefit corporation up to 90 days prior to December 1. Among the first to become a benefit corporation is Dancing Deer Baking Company. The company actively supports homeless and at-risk families where 35% of the retail price of Dancing Deer’s Sweet Home Project product line goes to fund scholarship programs. They also provide affordable treats to businesses and organizations through a Sweet Impressions Business Gift Program.
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