Dec 7, 201711:52 AMOpen Mic
Send us your blog for consideration!
Making a difference while making a profit
(page 2 of 2)
Local business response
One Madison-area business, Always Be Sustaining LLC, founded by former university professor Dr. Mark Starik, is currently in the process of becoming a Certified B Corp, as well as a benefit corporation. This sustainability management consultancy, which coaches organizations and individuals in implementing more environmentally- and socially-sustainable practices, is a good example of a for-profit business that will gain from this legislation. According to Starik, “Becoming a benefit corporation not only legally provides protection from other would-be owners who are only profit-motivated, it will also help our business identify and conduct business with organizational and individual customers, suppliers, and other community stakeholders who share our environmental and social mission.”
Becoming a benefit corporation under Wisconsin’s new law
In order to become a benefit corporation, the entity must be incorporated under chapter 180 of the Wisconsin Statutes. This means that only traditional corporations are permitted to become benefit corporations. LLCs, partnerships, co-ops, and other entity types would first need to convert to a chapter 180 corporation before becoming a Wisconsin benefit corporation. Many smaller businesses in Wisconsin are operated as LLCs. Conversion from an LLC to a traditional corporation typically is straightforward, especially if all the owners agree with the conversion (and, in this case, with becoming a benefit corporation). At least two-thirds of the corporation’s shareholders must formally consent in order for a corporation to become a benefit corporation. If the shareholder vote passes, the corporation would simply amend its articles of incorporation to state that the corporation is a benefit corporation, and the process is complete. Other than the amendment, no additional filings or fees are required to become a benefit corporation.
The benefit corporation movement is in its relative infancy. It is not yet clear what the overall impact of state benefit corporation laws will have on the corporate social responsibility space. It is also not clear how much protection the new statute will ultimately provide to directors. What is clear is that this movement is gaining steam, and Wisconsin’s socially responsible businesses will soon benefit from a law that allows them to make a profit and a difference.
Patrick Berry and Kirsten Spira are attorneys at the Boardman & Clark LLP law firm, where they work with corporations, LLCs, community banks, and nonprofits to provide legal services throughout the business life-cycle, including formation, expansion, and sale.
Click here to sign up for the free IB ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.