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In our final post in our business entities series, which has covered limited liability companies (LLCs), partnerships, and nonprofit corporations, we are taking a look at B Corporations.

So, you have B Corporations. You also have benefit corporations. And there are “B Corps” which is an abbreviation either name may use. Does that mean B Corporations have the same function and purpose as benefit corporations?

Tip: If you’re using Rollovers for Business Start-ups (ROBS aka 401(k) Business Financing) for funding or growth capital, you’re required to form as a C-Corporation.

The short answer is no, but it’s not uncommon to think that these terms are created equal. In this post, we’ll share more about B Corporations and what it means to start and complete the Certification process.

  1. Differences Between Benefit Corporations and Certified B Corporations
  2. What is B Corporation Certification?
  3. How to Become a Certified B Corp

What is the Difference Between Benefit Corporations and Certified B Corporations?

Let’s begin by discussing benefit corporations.

A benefit corporation is a legally recognized corporate entity.

How does it differ from a traditional for-profit corporation? A company that incorporates as a benefit corporation must adopt higher standards of purpose, accountability, and transparency. The articles of incorporation for a benefit corporation will commit to a “general public benefit” purpose. Creating a higher standard of purpose helps create an affirmative duty that directors and officers uphold. The benefit corporation may pursue its specific purpose — often based upon social and environmental reasons — and earn a profit.

A Certified B Corporation, on the other hand, is essentially a designation. It is obtained through a voluntary certification process. Any business, whether it was already incorporated as a benefit corporation or another entity formation like an LLC, may apply for Certification. We’ll detail more about what it means to be a Certified B Corp in a moment.

What is a Certified B Corporation?

A Certified B Corporation is a hybrid between a standard corporation and a nonprofit organization. Certified B Corporations earn a profit and commit to the triple bottom line of people, profit, and planet.

Receiving Certification from B Lab, the global network for the B Corp movement, is a big deal. It isn’t an easy Certification to obtain. Statistics on B Lab’s website note that only one in three businesses that submit to become a Certified B Corporation will certify for the designation. A Certified B Corporation is held accountable to high social and environmental standards. B Lab will thoroughly vet the organization to ensure the business meets the highest standards of verified performance.

Becoming a Certified B Corporation means that your organization is serving more than shareholders. It serves its community and the planet, making it the best business for the world.

How to Become a Certified B Corporation

Do you think your organization is ready to “B the Change?” Follow these steps to submit for Certification.

1. Discuss Certification with Leadership

Prior to beginning the Certification process, it’s important that all members of leadership are on board with shifting to Certified B Corp status. The plans to obtain B Corp Certification must be discussed before acting. Every member of the team should understand why these changes are useful for the business.


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The decision may be determined through a vote with the majority in favor of B Corp Certification. If the majority do not rule in favor, do not move forward with the Certification process.

2. Take the B Impact Assessment (BIA)

Measure what matters most using the B Impact Assessment (BIA). This free tool allows an organization to measure its impact on its workers, community, environment, and customers.

Start by taking the “quick snapshot” BIA assessment. This is a 30-minute test that offers an overview of what your organization does well and suggested best practices where it may improve.

Organizations that wish to obtain full Certification will need to complete the BIA full impact report. This is an assessment that takes two to three hours to complete and consists of 200 questions. The questions are determined by your company size, sector, and market. In order to pass the BIA, you must receive a total score of 80 across all impact areas.

After taking the full impact report, you may review your results holistically to see how your answers compare to other businesses. Then, create a customized improvement plan to further improve upon your score and be part of the B Corp movement.

3. Complete the Disclosure Questionnaire

Part of completing the BIA means answering questions in the Disclosure Questionnaire. This allows for a public compliant process. Background checks may be conducted as well as disclosing any sensitive business practices.

4. Meet the Legal Requirement

The legal requirement for a Certified B Corporation gives legal protection to directors and officers to consider the interests of all stakeholders when making business decisions. It also creates rights for shareholders to hold directors and officers accountable to consider these interests.

It also means that some legal changes may be necessary for the business. These may vary from reincorporating to adopting benefit corporation status. Consider consulting a legal professional to ask any questions you may have and to meet the necessary legal requirement.

5. Take the Verification Process

This is a multi-step process that allows the organization to find out if they met the 80-point score necessary for Certification. Upon completing the BIA and Disclosure Questionnaire, submit the materials in for review with B Lab. A B Lab Standards Analyst will reach out and confirm your submission.

6. Schedule an Assessment Review

Once your submission has been received, you will meet with a B Lab Standards Analyst (typically through a call or video chat) for an assessment review. This call will thoroughly review your organization and its plans to committing to the public benefit.

If the review is successful, the business will move forward for Certification. Remember to pay your certification fees and sign the B Corporation Declaration of Interdependence.

Congratulations — you’re officially a Certified B Corporation! (As a bonus, you now have a good idea of what it means to be a benefit corporation too.)

Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Twitter @deborahsweeney and @mycorporation.


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