# Benefit corporation
A benefit corporation is a for-profit corporate form, created by state statute, that commits a company to pursue a stated public benefit alongside profit and requires its directors to balance shareholder returns, the interests of people affected by the company's conduct, and that public benefit when making decisions.[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) The form is usually based on the Model Benefit Corporation Legislation that B Lab drafted with attorney [William Clark](https://www.edgepedia.org/william-clark) in 2010; Delaware calls its variant a public benefit corporation (PBC), codified at 8 Del. C. §§361–368.[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in)
| Key fact | Detail |
|---|---|
| Legal nature | A statutory corporate form, not a certification; Delaware's version is the public benefit corporation under 8 Del. C. §§361–368[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in) |
| Directors' duty | The board must balance stockholders' pecuniary interests, the best interests of those materially affected by the corporation's conduct, and the specific public benefit in the charter (8 Del. C. §365(a))[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) |
| Who can enforce | For actions to enforce the §365(a) balancing requirement, only stockholders owning at least 2% of shares, or, for listed corporations, the lesser of 2% or shares worth $2,000,000 in market value, may sue[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) |
| Reporting | Delaware PBCs give stockholders a benefit statement at least biennially; public reporting and third-party standards are optional[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) |
| B Corp certification | A separate private credential from B Lab requiring a verified B Impact Assessment score of 80 points, recertification every three years, and fees starting at USD 2,000 per year[3](https://usca.bcorporation.net/benefit-corporation/) |
| Adoption | Statutes in more than forty U.S. jurisdictions as of late 2024; B Lab counts 51 jurisdictions with benefit corporation laws[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in) • [4](https://usca.bcorporation.net/a-year-of-impact-in-motion-b-labs-2024-annual-report-summary/) |
| Enforcement record | No benefit enforcement proceeding is known to have gone to court[5](https://www.rccblaw.com/publication-Benefit_Corporations) |
## What a benefit corporation is
Delaware defines a public benefit corporation as a for-profit corporation intended to produce a public benefit or public benefits and to operate in a responsible and sustainable manner.[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) "Public benefit" itself is defined as a positive effect, or a reduction of negative effects, on one or more categories of persons, entities, communities, or interests other than stockholders.[6](https://lowellmilkeninstitute.law.ucla.edu/wp-content/uploads/2024/10/Dorff-Chapter-3-How-Are-PBCs-Different.pdf) A company may also name one or more specific public benefits, drawn from a list of charitable purposes, as additional corporate purposes.[7](https://www.bu.edu/bulawreview/files/2021/10/McDONNELL.pdf)
The form exists to solve a governance problem. B Lab developed the model legislation in 2010 for states to create this new entity type.[8](https://scholarship.law.campbell.edu/cgi/viewcontent.cgi?article=1761&context=clr)
## How the legal mechanism works
**The balancing duty.** Under 8 Del. C. §365(a), the board must manage the business in a manner that balances three interests: the pecuniary interests of stockholders, the best interests of those materially affected by the corporation's conduct, and the specific public benefit identified in the certificate of incorporation.[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) A Delaware court has confirmed that Section 365(b) provides a "safe harbor" under this framework and that PBC directors need not maximize shareholder value.[9](https://natlawreview.com/article/delaware-court-confirms-pbc-directors-need-not-maximize-shareholder-value) The Model Act spells out what directors must consider: effects on shareholders, employees, customers, community and societal factors, the environment, and long-term interests.[10](https://scholarship.law.umn.edu/cgi/viewcontent.cgi?article=1167&context=faculty_articles)
**Enforcement.** The primary enforcement mechanism is a benefit enforcement proceeding, a lawsuit for failure to create a general or specific public benefit or for violation of a statutory duty.[6](https://lowellmilkeninstitute.law.ucla.edu/wp-content/uploads/2024/10/Dorff-Chapter-3-How-Are-PBCs-Different.pdf) Standing is deliberately narrow. For an action to enforce the §365(a) balancing requirement, 8 Del. C. §367 requires plaintiffs to own at least 2% of outstanding shares, or, for exchange-listed corporations, the lesser of 2% or shares worth at least $2,000,000.[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) Under the Model Act, only the corporation itself, a director, or shareholders owning more than 2% of a class or series may sue, unless the articles or bylaws grant standing to others.[10](https://scholarship.law.umn.edu/cgi/viewcontent.cgi?article=1167&context=faculty_articles) Minnesota goes further: only shareholders may assert a claim, and the corporation is not liable for monetary damages for any failure to pursue a public benefit.[24](https://www.madgettlaw.com/news/minnesota-benefit-corporations-304a/)
**Reporting.** A Delaware PBC must provide its stockholders, no less than biennially, a statement on the corporation's promotion of the public benefit identified in its charter, covering objectives, standards, and objective factual information.[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) The report may be public or third-party assessed, but need not be either unless the charter or bylaws require it.[12](https://corpgov.law.harvard.edu/2022/02/18/converting-to-a-delaware-public-benefit-corporation-lessons-from-experience/) Delaware law treats this disclosure as an enforcement tool that helps keep the board accountable.[6](https://lowellmilkeninstitute.law.ucla.edu/wp-content/uploads/2024/10/Dorff-Chapter-3-How-Are-PBCs-Different.pdf)
## Benefit corporation vs B Corp certification
The two are frequently confused because they share a name and a founder. A "B Corp" is a certification granted by B Lab, a Pennsylvania nonprofit; it is a marketing and governance mark, not a legal form. A benefit corporation is an entity formed under a state statute.[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in) Certification says nothing about legal form: it can apply to a Delaware C-corp, a California LLC, or a New York limited partnership, it renews on a cycle, and it can be revoked.[13](https://www.incorporator.org/articles/benefit-corporation-reappraised-what-the-label-actually-buys-in-2023) A C-corp or LLC can pursue certification without changing its charter, whereas a benefit corporation changes its charter and carries statutory obligations whether or not B Lab ever audits it.[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in)
The two interact. All certified B Corps must make a legal commitment to stakeholder governance, amending their governing documents to require consideration of all stakeholders; certification does not itself determine the entity's legal form.[14](https://www.morganlewis.com/-/media/files/special-topics/vcpefdeskbook/impact-investing/benefit-corporations-and-certified-b-corps-whats-the-difference.pdf?rev=-1)
**Assessment and cost.** Certification requires a minimum verified score of 80 points on the B Impact Assessment, with recertification every three years against an evolving standard; Delaware benefit corporation performance, by contrast, is self-reported.[3](https://usca.bcorporation.net/benefit-corporation/) B Lab certification fees start at USD 2,000 per year and increase with annual revenue.[3](https://usca.bcorporation.net/benefit-corporation/) A law firm guide describes the fee schedule as ranging from $500 for companies with up to $499,999 in annual revenue to $50,000 for companies over $1 billion; B Lab's own current figure for the entry point is $2,000, so the schedules differ between sources.[15](https://www.spsk.com/certified-b-corporation-public-benefit-corporations-and-the-impact-to-corporate-governance) State filing fees for the legal form run from approximately USD 70 to USD 350.[3](https://usca.bcorporation.net/benefit-corporation/)
## Where it exists and how statutes differ
As of late 2024, B Lab's tracker shows benefit corporation or PBC statutes in more than forty U.S. jurisdictions, with the Model Act the substrate for roughly thirty-six of them.[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in) B Lab's 2024 annual report counts 51 jurisdictions with benefit corporation laws worldwide.[4](https://usca.bcorporation.net/a-year-of-impact-in-motion-b-labs-2024-annual-report-summary/)
The statutes differ materially in reporting. Delaware requires only a biennial statement to stockholders, with no public reporting or third-party standard required.[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html) • [3](https://usca.bcorporation.net/benefit-corporation/) [Connecticut](https://www.edgepedia.org/connecticut) requires each benefit corporation to select a third-party standard by which to assess its pursuit of a general public benefit and any specific public benefit.[16](https://cga.ct.gov/2021/pub/chap_604.htm) Oregon requires benefit companies to adopt a third-party standard, prepare an annual benefit report identifying actions, hindrances, and performance against the standard, distribute it to owners, and post it on the company website under ORS 60.750–60.770.[17](https://sos.oregon.gov/business/register/pages/benefit-company.aspx)
## By the numbers
- 9,368 certified B Corps worldwide at the end of 2024, after 1,317 new businesses joined in 2024, up 16% from 2023.[4](https://usca.bcorporation.net/a-year-of-impact-in-motion-b-labs-2024-annual-report-summary/)
- 75 certified publicly traded companies, per B Lab's 2024 report.[4](https://usca.bcorporation.net/a-year-of-impact-in-motion-b-labs-2024-annual-report-summary/)
- 15 public PBCs and thousands of private PBCs as of early 2022.[12](https://corpgov.law.harvard.edu/2022/02/18/converting-to-a-delaware-public-benefit-corporation-lessons-from-experience/)
- 80-point BIA threshold; fees from USD 2,000 per year; filing fees of roughly USD 70 to USD 350.[3](https://usca.bcorporation.net/benefit-corporation/)
- 2% ownership (or $2,000,000 market value for listed companies) needed to sue.[1](https://www.delcode.delaware.gov/title8/c001/sc15/index.html)
- Adoption was slow at first: four years after the first legislation passed, only about 1,000 of the millions of eligible companies had adopted the form.[11](https://bacademics.org/wp-content/uploads/2023/10/1-s2.0-S0007681314001827-main-44.pdf)
## How it compares with alternatives
California and Washington enacted alternative purpose-driven forms in 2011 and 2012, the Flexible Purpose Corporation and the Social Purpose Corporation; in 2015 California renamed the Flexible Purpose Corporation to equate it with the Social Purpose Corporation.[18](https://link.springer.com/chapter/10.1007/978-3-031-14216-1_14) The flexible purpose model is narrower than the benefit corporation: there is no requirement to pursue a general public benefit, and the corporation need only identify one or more specific benefits it will pursue.[10](https://scholarship.law.umn.edu/cgi/viewcontent.cgi?article=1167&context=faculty_articles) Against plain corporate social responsibility programs, the benefit corporation's difference is that the commitment sits in the charter and is enforceable by stockholders, rather than resting on management discretion.
## Practice: converting, financing, and enforcement
**Conversion mechanics.** A general business corporation converts to a PBC through a charter amendment approved by the board and by stockholders.[19](https://law.stanford.edu/wp-content/uploads/2024/08/SJLBF%5FSpr2024%5FDammann%5FFinalProof.pdf) Delaware's threshold has fallen steadily: 90% stockholder approval in 2013, two-thirds after a 2015 amendment, and, after the July 2020 HB 341 amendment, a simple majority under DGCL §§242(b) and 251, with appraisal rights for conversion eliminated.[12](https://corpgov.law.harvard.edu/2022/02/18/converting-to-a-delaware-public-benefit-corporation-lessons-from-experience/) One practitioner source states the 2020 threshold as a two-thirds vote of outstanding stock; the Harvard Forum account, tracking the statute, gives a simple majority.[13](https://www.incorporator.org/articles/benefit-corporation-reappraised-what-the-label-actually-buys-in-2023) The practical effect either way was to make PBC conversion a normal charter amendment rather than a bet-the-company governance project.[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in)
**Why companies convert.** Lemonade went public as a PBC in July 2020, [Vital Farms](https://www.edgepedia.org/vital-farms) followed that month, and Allbirds, Veeva, and [Warby Parker](https://www.edgepedia.org/warby-parker) held PBC status at or after their listings; Veeva converted in 2021 while public.[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in) For these companies the charter commitment was what the brand promised customers, and the statute let the board defend that commitment in a liquidity event without litigating from scratch.[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in) Both Veeva and United Therapeutics, the first two major public companies to convert, received overwhelming stockholder support.[12](https://corpgov.law.harvard.edu/2022/02/18/converting-to-a-delaware-public-benefit-corporation-lessons-from-experience/) Patagonia, a California benefit corporation since 2012, restructured in September 2022, transferring voting stock to the Patagonia Purpose Trust and economic stock to the Holdfast Collective, a 501(c)(4) that receives the company's profits for environmental causes.[2](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in)
**Enforcement in practice.** Despite the statutory machinery, no benefit proceeding is known to have actually gone to court, and there is no statutory penalty for failing to publish the biennial benefit report.[5](https://www.rccblaw.com/publication-Benefit_Corporations) Delaware Chancery has issued its first guidance on PBC duties, holding that the Revlon framework, which governs sale-of-control review for ordinary corporations, cannot simply be transplanted into the benefit corporation context.[20](https://sigmalawgroup.com/blog/2026-08-03-delaware-pbc-fiduciary-duties/) Early commentary also noted that uncertainty was high because insufficient case law existed to clarify fiduciary duties, benefit report contents, and acceptable third-party standards.[11](https://bacademics.org/wp-content/uploads/2023/10/1-s2.0-S0007681314001827-main-44.pdf)
## Does the form deliver benefit, and recent developments
**The efficacy debate.** A working paper argues that conventional corporate law's business judgment rule (courts defer to directors' good-faith business decisions) already permits directors to weigh non-shareholder interests, so benefit corporation statutes offer scant real-world effect.[21](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5007761) On financial performance, a panel study of 103 B-Corp companies certified between 2013 and 2020 found that B-Corps had smaller economic returns than pre- and non-certified companies during the two years after certification, but that in the long run the differences in financial performance were not statistically significant.[22](https://www.sciencedirect.com/science/article/pii/S2405844024129465) That study measures certification, not the legal form itself; direct evidence on whether benefit corporation status produces more social or environmental output remains limited.
**Recent developments.** B Lab counted 51 jurisdictions with benefit corporation laws and 75 certified publicly traded companies in its 2024 report.[4](https://usca.bcorporation.net/a-year-of-impact-in-motion-b-labs-2024-annual-report-summary/) The highest-profile recent adoption is [Anthropic](https://www.edgepedia.org/anthropic), which as of September 2026 is organized as a public benefit corporation; Reuters notes that there is no legally required independent auditing process to ensure a PBC complies with its mission statement, and that some PBCs have sought certification from B Lab on social and environmental practices.[23](https://www.reuters.com/business/media-telecom/what-is-public-benefit-corporation-anthropic-legal-structure-2026-09-29/) Open questions remain on how many legal-form benefit corporations exist in total, on international equivalents outside the United States, and on whether the form changes conduct beyond what ordinary corporate law already allows.
## References
1. [Delaware Code Online, Title 8, Chapter 1, Subchapter XV (Public Benefit Corporations)](https://www.delcode.delaware.gov/title8/c001/sc15/index.html)
2. [Benefit Corporation 2024: PBC, B Corp, State Statutes, Incorporator.org](https://www.incorporator.org/articles/the-benefit-corporation-a-decade-and-change-in)
3. [Benefit Corporations, B Lab U.S. & Canada](https://usca.bcorporation.net/benefit-corporation/)
4. [A Year of Impact in Motion: B Lab's 2024 Annual Report Summary](https://usca.bcorporation.net/a-year-of-impact-in-motion-b-labs-2024-annual-report-summary/)
5. [To "B" or Not To "B" a Benefit Corporation, Rucci Cordaro Brennan](https://www.rccblaw.com/publication-Benefit_Corporations)
6. [Dorff, Chapter 3: How Are PBCs Different? UCLA Lowell Milken Institute (2024)](https://lowellmilkeninstitute.law.ucla.edu/wp-content/uploads/2024/10/Dorff-Chapter-3-How-Are-PBCs-Different.pdf)
7. [The Corrosion Critique of Benefit Corporations, Boston University Law Review](https://www.bu.edu/bulawreview/files/2021/10/McDONNELL.pdf)
8. [Fiduciary Ecosystems: Benefit Corporation Shareholder and Statutory Duties, Campbell Law Review](https://scholarship.law.campbell.edu/cgi/viewcontent.cgi?article=1761&context=clr)
9. [PBC Directors Need Not Maximize Shareholder Value, National Law Review](https://natlawreview.com/article/delaware-court-confirms-pbc-directors-need-not-maximize-shareholder-value)
10. [Committing To Doing Good and Doing Well: Fiduciary Duty in Benefit Corporations, Minnesota Law Review](https://scholarship.law.umn.edu/cgi/viewcontent.cgi?article=1167&context=faculty_articles)
11. [Benefit corporations at a crossroads, Business Horizons](https://bacademics.org/wp-content/uploads/2023/10/1-s2.0-S0007681314001827-main-44.pdf)
12. [Converting to a Delaware Public Benefit Corporation: Lessons from Experience, Harvard Law School Forum on Corporate Governance (2022)](https://corpgov.law.harvard.edu/2022/02/18/converting-to-a-delaware-public-benefit-corporation-lessons-from-experience/)
13. [Benefit Corporation vs PBC vs B Corp: 2023 Guide, Incorporator.org](https://www.incorporator.org/articles/benefit-corporation-reappraised-what-the-label-actually-buys-in-2023)
14. [Benefit Corporations and Certified B Corps—What's the Difference? Morgan Lewis](https://www.morganlewis.com/-/media/files/special-topics/vcpefdeskbook/impact-investing/benefit-corporations-and-certified-b-corps-whats-the-difference.pdf?rev=-1)
15. [Certified B Corporation, Public Benefit Corporations and the Impact to Corporate Governance, SP+SK](https://www.spsk.com/certified-b-corporation-public-benefit-corporations-and-the-impact-to-corporate-governance)
16. [Connecticut General Assembly, Chapter 604: Benefit Corporations](https://cga.ct.gov/2021/pub/chap_604.htm)
17. [File to Become a Benefit Company, Oregon Secretary of State](https://sos.oregon.gov/business/register/pages/benefit-company.aspx)
18. [Introduction to the Law of Benefit Corporations and Other Public Purpose-Driven Companies, Springer](https://link.springer.com/chapter/10.1007/978-3-031-14216-1_14)
19. [Publicly Traded Public Benefit Corporations: An Empirical Investigation, Stanford Journal of Law, Business & Finance](https://law.stanford.edu/wp-content/uploads/2024/08/SJLBF%5FSpr2024%5FDammann%5FFinalProof.pdf)
20. [Delaware Chancery Issues First Guidance on Public Benefit Corporation Duties, Sigma Law Group](https://sigmalawgroup.com/blog/2026-08-03-delaware-pbc-fiduciary-duties/)
21. [Substance over Symbolism: Do We Need Benefit Corporation Laws? SSRN](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5007761)
22. [B-Corp certification and financial performance: A panel data analysis, Heliyon](https://www.sciencedirect.com/science/article/pii/S2405844024129465)
23. [Explainer: What is a public benefit corporation, the Anthropic legal structure? Reuters](https://www.reuters.com/business/media-telecom/what-is-public-benefit-corporation-anthropic-legal-structure-2026-09-29/)
24. [madgettlaw.com](https://www.madgettlaw.com/news/minnesota-benefit-corporations-304a/)
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*Topic: Encyclopedia › Society and history › Economics and business › Business and work › Business and work overview › Companies and corporations › Companies overview*
*Initially written Sep 17, 2026 · Reviewed: Sep 17, 2026; Oct 10, 2026 · Edited: Oct 10, 2026; Oct 15, 2026 · Last review: Oct 10, 2026*
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License: Edgepedia Community License 1.0, https://www.edgepedia.org/edgepedia/license