Hi Dana, a lot of start-ups have wonder what does B corp exactly mean (purpose, tax etc)?

A US entity corporation can either be a "C" corporation or "S" corporation(stricter qualifications), which are tax statuses. A benefit corporation has to choose whether to be taxed as a C corporation or S corporation, there is no relevance of the "benefit corp" status to the IRS.

VCs would also normally terminate an S corporation because preferred stock isn't allowed.

The only real difference between a corporation and a "benefit" corporation is that a benefit corporation through its legal documents claims it will serve a public good. in some states the entity actually has to file a report annually to explain its progress in the public benefit/purpose. I believe if you google B-Lab there is some vague Information on the meaning of "public benefit".

The status of benefit corporation is not to be confused with a true not for profit entity (501c3). The shareholders of benefit corporation still have the economic right to the profits of the corporation, where as a nonprofit entity actually has no owners.

In my opinion the benefit corporation status just is a marketing play, my view it's deceptive because without looking twice someone might confuse one with a charity.