A public benefit corporation is a corporation created to generate social and public good, and to operate in a responsible and sustainable manner.
Governmental Public Benefit Corporations
A public benefit corporation created by a government, also known as a statutory corporation or government owned corporations, generally provide free or subsidized services or benefits for the public. Some examples of government-provided public benefit corporations include transit systems, public libraries, and hospitals.
Private Public Benefit Corporations
Alternatively, private, for profit entities and corporations can also be considered public benefit corporations, also known as a PBCs, Benefit Corporations, or B Corps. Unlike traditional C Corporations whose primary interest is maximizing shareholder value, public benefit corporations balance stakeholders’ pecuniary interests, the interests of those who are involved and affected by the corporation (such as employees and customers), as well as the advancement of their intended public benefit goal. The purpose of the corporation and the public benefit(s) intended must usually be stated in the company’s formation documents. Furthermore, public benefit corporations are required to undergo auditing and assessments, and report their progress on delivering their public benefit purpose. Some states, such as Delaware, have recently made it easier for existing companies to convert into PBCs by amending their certificates of incorporation. Some well-known examples of privately-held PBCs include clothing brand Patagonia, ice cream manufacturer Ben & Jerry’s, and crowd-funding website Kickstarter.
[Last updated in November of 2020 by the Wex Definitions Team]