If you are exploring signs of responsible business, you will likely come across the terms "B corporation" and "benefit corporation"...and while they may sound like synonymous buzzwords in social innovation, they are actually distinct concepts.
Here are 3 key differences to help keep them straight:
1. B Corporation is a voluntary certification. B corporation certification recognizes companies that are purpose-driven and which create benefit for the community, the environment, and employees--as well as for shareholders. B corporation status is conferred on companies that apply with a passing score on the B Rating System and that agree to take steps to legally expand the fiduciary duty beneficiaries beyond shareholders. The certification is granted by an advisory committee from B Lab--a non-profit organization dedication to B Corporation certification.
2. Benefit Corporation is a legal corporate structure. You've likely heard of corporate structures such as a C corp or an S corp, similarly, benefit corporation is a new class of corporation that serves society and the environment, as well as shareholders. As of June 2011, four states have passed benefit corporation legislation (Maryland, Vermont, New Jersey, Virgina).
3. Becoming a Certified B Corporation is one way to meet statutory requirements for Benefit Corporation status. This is true for states that have passed benefit corporation legislation.