B corps - what are they?
B Corps
B Corps are a type of corporation called a benefit corporation. Companies get to focus on higher purposes while also gaining a profit. This in theory is supposed to blend the profit incentive with political objectives. Millennials may not want to go to work just for a pay check and these corporations may be inspiring. At the same time social objectives are difficult to mesh with the concept of fiduciary duty.
VCs don't necessarily like B Corps and seem to prefer C Corps. Most corporations in Silicon Valley are C corps. In a way the blockchain community has also been infiltrated with the corporatist mind set where even if you start a non-profit entity and distribute a token there are people who still even then will expect a profit. This in my opinion is a problem that arose from ICO culture vs fundraising culture. Crowd funding or crowd sales have been replaced by the term ICO and this is evidence that speculators are now the main customer of blockchain technology.
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.
Nice post, Now I understand what is B Corps
Thanks for sharing a USEFULL information
Wow that's a great post.
yes you right bro it happend
Sadly you are right in that the driving force behind crypto right now is greed
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