Just like Jason Voorhees. You kill off B-corps in the General Assembly, and they rise from the dead.
Benefit corporations are different from the traditional sort of corporation we all know. The traditional definition of a corporation is an enterprise that acts to achieve the maximum benefit for their shareholders. B-corps, on the other hand, set the pursuit of profit aside and aim to act for “the benefit” of society and the environment. Becoming a B-corp involves intensive reporting that gets reviewed regularly by a “third party.”
It’s come up in the legislature in 2011 and in 2013 and 2014.. Tea Party groups have attacked this kind of legislation as an instrument of the United Nations’ Agenda 21. Civitas went after it as being antithetical to capitalism.
In the NC House, the environmental movement’s favorite Republican, Chuck McGrady, and their favorite Democrat, Pricey Harrison, are teaming up with Leo Daughtry (R-Smithfield) and Robert Reives (D-Sanford) to try to resurrect b-corporations in North Carolina.
We wrote about this last May when then-Speaker Thom Tillis seemed keen on getting these things passed into law. Last year, a really expensive Raleigh lawyer laid out the pros and cons of these things:
Benefit corporations recognized by new state laws (see our Benefit Corporation Legislative Status Map and Chart for details about each state’s passed or proposed legislation) offer some exciting new opportunities for existing businesses and new businesses, which traditional business structures do not offer. Consider the following benefits to your company when deciding if a benefit corporation is right for you.
The primary benefits of choosing a legislatively recognized, for-profit benefit corporation over a non-profit model are that benefit corporations have shareholders, can raise capital more freely, and can distribute profits. Tax-exempt nonprofits have obvious tax advantages and can earn profits, but they cannot distribute the profits, as there are no shareholders. A benefit corporation can also pursue for-profit business goals at the same time that it pursues its identified social missions or public benefits.
The primary benefits of choosing a benefit corporation over a traditional for-profit model are (1) protecting the company from shareholder suits complaining that the company’s management is focusing on considerations other than maximizing profits, and (2) weaving the company’s social mission into the corporation’s formative documents, so that the mission cannot be eviscerated by a hostile takeover without a supermajority vote of shareholders. Financially, there can be other advantages. For example, some jurisdictions offer tax breaks and bidding preferences to benefit corporations. […]
Interestingly, in 2013, one of the sharpest critics of B-corps was a young legislator from Cleveland County named Tim Moore:
Rep. Tim Moore, R-Cleveland, said it’s also unnecessary. He said the state’s current corporations law already allows for a public-benefit purpose. “You can have a shareholder agreement that defines what the corporation is going to do.”
Moore suggested the force behind the B-Corp push is B-Lab, a company that charges up to $25,000 to certify benefit corporations.
“This bill is being promoted all around the country by a third-party group that wants to be the clearinghouse that determines if corporations meet the criteria,” Moore said. “The bottom line is, you don’t need a B-Corp.”