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Can someone give a simple explanation on the difference between incorporating normally, incorporating as a non-profit, and incorporating as a "public benefit co
by Rifu 11y ago
Can someone give a simple explanation on the difference between incorporating normally, incorporating as a non-profit, and incorporating as a "public benefit corporation"? I've tried to look it up but I'm getting conflicting information.
- plonh 11y agoA PBC has stronger protection against being sued by shareholders for focusing on goals besides $ valuation .
- oddevan 11y agoAlso, they are still a "for-profit" entity; they just legally declare they're going to do things with said profit besides make money for the shareholders. Going full non-profit would have stricter requirements for income, marketing, business deals, etc. Mozilla did something similar where you download Firefox from Mozilla Inc. that has business arrangements with Google and Pocket (for example); The Mozilla Foundation itself can't enter into those sorts of agreements without violating their non-profit status. It's all really complicated and a big headache and Kickstarter's doing a good job by avoiding all that, honestly.
- tvanantwerp 11y agoB corps explicitly include the creation of public benefit in their goals, whereas traditional C corps exist only to earn profits for the shareholders. Incorporating as a B corp allows a company to pursue public-oriented goals that could diminish profitability without being liable to shareholder lawsuits. They are both taxed the same. This is not federal law--B corps only exist in some states, and only according to the enacting legislation of those states, so the exact laws governing them will vary.