What is a B-Corporation?
B-corporations, or benefit corporations, are a new kind of business model where the company strives to balance purpose and profit in an attempt to help solve some of society’s most challenging problems. B-corporations use the power of a business’s profits and growth to reduce inequality and poverty. Other common goals of B-corporations include working towards creating a healthier environment, stronger communities, and higher quality jobs. In the end, however, most B-corporations share a similar goal, which is to have a positive impact on their employees, communities, and the environment.
Oklahoma recently joined the B-Corporations movement with the passage of House Bill 2423, which Governor Stitt signed into law in April 2019. This recently passed law allows for corporations in Oklahoma to classify as a benefit corporation if they meet certain requirements. Oklahoma companies which qualify as B-corporations can focus on the purpose the company has adopted by allowing the company to be more transparent when it comes to making corporate decisions.
How to Become a Benefit Corporation in Oklahoma?
Corporations seeking to be obtain benefit corporation status in the state of Oklahoma must satisfy the requirements of both the Oklahoma General Corporation Act and the Oklahoma Benefit Corporation Act. First, the company seeking to be qualified as a benefit corporation must incorporate according to the guidelines of the Oklahoma General Corporation Act. Second, the company must adopt a general public benefit as one of the purposes of the corporation.
Basics of the Oklahoma General Corporation Act
The first requirement is to incorporate your company according to the guidelines of the Oklahoma General Corporation Act. To incorporate your company in accordance with the Oklahoma General Corporation Act, a person, partnership, association or corporation, may incorporate a company by filing a certificate of incorporation with the Secretary of State. The certificate of incorporation generally must include must include the name of the corporation, the address of the corporation’s registered office in Oklahoma, the nature or purpose of the business, and the name and address of the incorporator(s).
Basics of the Oklahoma Benefit Corporation Act
In Oklahoma, any corporation wishing to be qualified as a benefit corporation must be incorporated in accordance with the Oklahoma General Corporation Act and the certificate of incorporation must also state that it is a benefit corporation. Benefit corporations in Oklahoma must adopt a general public benefit as one of its purposes for existing. This general public benefit is in addition to any purpose the corporation has provided as required under the Oklahoma General Corporation Act. General public benefit has been defined as having a material positive impact on society and the environment as a whole when the business and operations of a benefit corporation are assessed against a third-party standard.
In addition to the general public benefit and any other purpose adopted or required under the Oklahoma General Corporation Act or the Oklahoma Benefit Corporation Act, companies seeking to be qualified as benefit corporations may also identify one or more specific public benefits that the corporation adopts to meet the requirements of the Oklahoma Benefit Corporation Act. Specific public benefits have been defined to include providing low-income or underserved individuals or communities with beneficial products or services, promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business, protecting or restoring the environment; improving human health; promoting the arts, sciences, or advancement of knowledge; increasing the flow of capital to entities with a purpose to benefit society or the environment; and conferring any other particular benefit on society or the environment.
One other key difference between a benefit corporation and other corporations is that a benefit corporation must provide its shareholders with a statement outlining the promotion of any general or specific public benefits which were identified in the certificate of incorporation. This statement must include the objectives the board of directors has established to promote any identified benefits, any standards the board of directors has adopted to measure the corporation’s progress in promoting any identified benefits, objective facts based on any adopted standards regarding the corporations success in meeting the objectives for promoting any general or specific public benefits, and an assessment of the corporation’s success in meeting those objectives and promoting any general or specific public benefit.
Why Become a Benefit Corporation?
As indicated by the previous sections of this article, becoming certified as a benefit corporation in Oklahoma will result in some additional requirements being imposed on the company. So why would you want to become a benefit corporation? In an ever-changing world, more and more people are striving to make it a better place for everyone who lives here. Benefit corporations offer companies a way build a better world by improving their local communities. Additionally, being qualified as a benefit corporation lets shareholders upfront know that this business is a different type of business that is not solely focused on profit but also has the community and the world’s interests in mind when making corporate decisions.
Call us at (580) 234-6600 to discuss how a benefit corporation might fit into your business plans.