Florida Guide to Benefit Corporations.

Florida Guide to Benefit Corporations

Wanting to know more about Florida Benefit Corporations…

…because you want to become a B Corporation certified by B Lab?

…because you want to lock in your profitable purpose as you grow?

…because you want to brand and capture public goodwill as a benefit company?

…because you want to attract top-notch talent as you scale?

…because you want to grow a relevant, scalable, and sustainable enterprise?

Then this Guide to Florida Benefit Corporations is for you!

Fundamentals of Florida Benefit Corporations

B Corps aren’t Benefit Corporations (necessarily) — Certified B Corps are companies that have been endorsed by the U.S. nonprofit B Lab to be good corporate citizens with triple bottom line business models. They get to brand themselves with the B Corp certification logo, similar to the way buildings can certify as LEED and chocolatiers as Fair Trade. As part of the B Corp certification process, B Lab requires companies that are legally structured as corporations to convert to Public Benefit Corporations. However, LLC’s and even sole proprietors can become Certified B Corps. If you are a sole proprietor or LLC, you don’t necessarily have to convert to a Benefit Corporation to become a B Corp. Also, you can realize the many advantages of a Florida Benefit Corporation legal structure even if you never intend to certify with B Lab as a B Corp business. Read more about how B Corps and Benefit Corporations are related here.

Oranges and Oranges to the IRS — Your Florida Benefit Corporation is treated like a typical corporation for tax purposes. There are no magic tax breaks here, but your accountant can guide you on what impact expenses may be deductible to a Benefit Corporation that otherwise aren’t connected to the purpose of a standard corporation.

Palm Trees don’t Shiver — Florida Benefit Corporations are governed by Florida law — not Delaware, not Federal, not Tribal — this is a Sunshine thing, baby! When registering and operating as a Florida Benefit Corporation, you need to make sure you are following the Florida statute and ongoing legal standards when it comes to transparency, shareholder rights, and other key operational aspects. If you are not following the rules, e.g. how and when to publish your required impact reports, then you can lose the protections of the Benefit Corporation framework, and potentially be subject to shareholder disputes. Fortunately, the Christopher & Panasci ESG team at Rockridge can help you understand best operational practices and what the Florida Benefit Corporation means for your investors, executives, and customers.

You Look Great in that Bikini — Florida Benefit Corporations must be transparent in highlighting what they are doing to further their general and specific public benefits. You gotta walk the walk to maintain legal protection for your impact purpose and prioritized stakeholders.

You Look Great in those Shorts — Florida Benefit Corporations must clearly state the stakeholders they are benefitting beyond their general corporate purpose to make profit. The public has to know what you’re all about and what you’re working with.

Florida Benefit Corporation Statutory Sections that Matter

Florida Business Corporation Act Part 111 — §607.601 — §607.613

A few of the statutory sections of the Florida Benefit Corporation that you’ll want to pay particular attention to include:

Notice. A Florida Benefit Corporation must state in its articles of incorporation its status as a benefit corporation and identify a general public benefit, identified as a material positive impact on society and the environment, taken as a whole and assessed against a third-party standard (such as the B Lab Impact Assessment).

Conversion. A Florida corporation cannot convert to a Benefit Corporation without two-thirds approval of its shareholders. All shareholders may vote irrespective of voting or class limitations in the corporation’s charter or bylaws. Termination of Benefit Corporation status by vote or acquisition requires two-thirds shareholder approval. If terminated, shareholders are entitled to appraisal rights.

Operations. Directors and certain officers of a Florida Benefit Corporation must consider not only shareholders, but also employees, suppliers, community, environment, and long-term interests of the corporation in performing their duties.

Transparency. A Florida Benefit Corporation must prepare an annual benefit report to be distributed to shareholders and posted on its website. Failure to deliver an annual report can result in judicial order and discretionary award of attorneys’ fees.

Compliance. A Florida Benefit Corporation will not be financially liable for violating any of the statutory requirements and may only be charged with violating the requirements through specific beneficiary enforcement proceedings.

Resources:

An Entrepreneur’s Guide to Going “B” by Center for Business and Environment at Yale

An Investor’s Guide to B Corps by Center for Business and Environment at Yale

Better Business by Chris Marquis

Benefit Corporation Law and Governance by Fredrick Alexander

Florida for Good is the leading center for B Corp and Benefit Corporation resources in Florida

How are B Corps and Public Benefit Corporations Related by Rockridge Venture Law

Rockridge® Guide to Southeastern Benefit Corporation Statutes by Rockridge Venture Law

The Delaware Public Benefit LLC: Use it to Become a “Benefit Company” in Your State by Rockridge Venture Law

The Legal Requirement for Certified B Corporations by B Lab

About Kevin Christopher

Kevin Christopher is the founder of Rockridge Venture Law®, and co-founder of ResoluteTherapeutics, a CARB-X funded antibiotic innovator, and Calliope Bio, a Yale launched synthetic biology startup and recent participant in the Nucleate Activator and Berkeley Skydeck accelerators. Kevin is a 2050 Fellow at the Center for Business and Environment (CBEY) under Vincent Stanley, a global leader in sustainability and Director of Philosophy at Patagonia. Kevin has led Rockridge® to become a B Corp Best For The World and Real Leaders Top 150 global impact company has been recognized as a SuperLawyer and Conscious Company Magazine’s Top Business Leader.

Kevin’s corporate and IP practice focuses on the crossover of innovation + impact in venture ecosystems. He is a registered patent attorney and published poet, uniquely combining creativity and technological acumen in registration of intellectual property, business transactions, and litigation. Kevin’s practice areas including: patent and trademark prosecution, licensing and litigation; corporate law, with an emphasis on benefit corporations, socially responsible businesses and high-growth emergent companies; government contracts, with an emphasis on innovation funding; corporate and investor financing; and, technology commercialization.

As an entrepreneur, Kevin has founded companies in biotech, renewables, and consumer product industries, all active and growing. Kevin is a leader within the B Corp community, having founded Tennessee’s local B Corp network B Tennessee and serving as pro bono counsel to B Academics. Kevin mentors entrepreneurs as program advisor with Bethesda Green Hub, First Flight Venture Center, Nashville Entrepreneur Center, University of California Venture Catalyst, and Yale Tsai CITY. With a background in public-private partnerships, Kevin is also a National Institutes of Health (NIH) RadX faculty member, and National Science Foundation (NSF) Center for Bioplastics and Biocomposites program evaluator.

To discuss Florida Benefit Corporations with Kevin Christopher, schedule an appointment through Calendly or email him directly at kevin@rockridgelaw.com.