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What are Benefit Corporations
Le Benefit Corporation (SB) are companies that choose to exceed the traditional objective of profit alone, integrating into their statute the commitment to generate a positive impact on society and the environment.
These are not non-profit organizations, nor simply companies that adopt social responsibility practices: they are for-profit reality that incorporate into their operating model a broader and more sustainable vision of doing business.
Benefit Companies pursue one or more purpose of common benefit, committing to operating in such a way as:
- responsible;
- sustainable;
- transparent.
This must be done with respect to all stakeholders with which they interact: people, communities, territories, environment, cultural and social heritage, bodies and associations.
The common benefit is defined as the pursuit, in the exercise of economic activity, of one or more positive effects, or the reduction of negative effects, on one or more of the categories of stakeholders mentioned.
For this reason, they integrate into their corporate purpose objectives that go beyond the mere creation of economic value.
So let's understand how Benefit Corporations embody a new business paradigm, standing out on the market thanks to a more attentive, forward-looking approach in line with the challenges of the 21st century.
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The 3 distinctive elements of Benefit Corporations
As we have seen, the Benefit Company are distinguished from traditional for-profit companies because they voluntarily choose to pursue, in addition to profit, one or more purposes of common benefit.
But let's see what are the 3 distinctive elements of these companies.
1. Dual corporate purpose
A first distinctive element of Benefit Companies concerns the presence of a double corporate purpose: the creation of economic value and the pursuit of purpose of common benefit, both explicitly indicated in the statute. This implies that any strategy, investment, or organizational change must reflect this balance.
2. Governance oriented to sustainability
Benefit Corporations must appoint a Figure of management responsible for ensuring the coordination of activities related to social and environmental impact. This person plays a key role in the keep business objectives aligned and in ensuring that the interests of stakeholders are considered in strategic decisions.
Among the most relevant aspects are:
- the integration of common benefit objectives in the statute;
- the appointment of one or more impact managers within management;
3. Impact reporting
Finally, a third characterizing element is the reporting of the impact. Every Benefit Corporation is required to draw up an annual impact report, using recognized evaluation standards.
This document describes the actions taken, the results obtained And the future commitments, allowing you to:
- ensure transparency to all stakeholders;
- objectively evaluate the effectiveness of the strategies adopted;
- monitor progress over time related to common benefit objectives.
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How were Benefit Companies created in Italy
Le Benefit Company In Italy they are born from a path of cultural and regulatory evolution that draws inspiration from the international movement of B Corp, launched in 2006.
This movement promotes a profound change in the way of conceiving the company: no longer only as a subject oriented to the distribution of dividends to shareholders, but as an actor capable of generating value for the entire community.
According to thetraditional legal approach, in fact, companies had the exclusive task of pursuing profit, thus limiting the possibility for entrepreneurs and management to adopt strategies also oriented to the common good. In addition, this vision made virtuous businesses more virtuous vulnerable to changes in governance, new entries among shareholders or extraordinary transactions such as the listing on the stock exchange, which could jeopardize the social mission pursued.
The idea of introducing a legal instrument that would allow companies to integrate collective benefit purposes into their statute began to take shape in Italy in 2014.
The legislative text was then integrated into Stability Law 2016, coming into force on January 1, 2016.
With this law (n. 208 of December 28, 2015, art. 1, paragraphs 376—384), Italy has become the first Country in the world, after the USA, to officially recognize a legal form that allows companies to combine profit with the generation of a common benefit.
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How to become a Benefit Corporation
Becoming a Benefit Corporation requires a structured path, which combines strategic awareness and formal adjustments. This is a process that involves both the value dimension of the company and technical and operational aspects, with the objective of authentically integrate the objectives of common benefit in the business model.
The first step consists of a preliminary assessment of the business reality.
At this stage it is important to reflect on Mission And on values that guide the company, identifying the specific objectives of common benefit that you want to pursue and evaluating the economic impact of the transformation. This moment of analysis is essential to verify the real motivation In pursuing a real corporate sustainability.
The transformation continues with the Amendment to the corporate by-laws, a central element from a legal point of view.
Among the actions planned in this phase are:
- the inclusion in the statute of the purposes of common benefit;
- the definition of responsible governance methods;
- the choice of impact assessment standards.
Then we proceed with the notarial formalization of the transformation.
This step involves the approval of the statutory amendment by the shareholders' meeting, the drafting of the notarial act and the registration with the Companies Register. The company also has the right, but not the obligation, to add the words “Benefit Company” or the abbreviation “SB” to its name or company name, and to use them in documentation and communications to third parties.
This is the moment that legally enshrines the company's new identity.
Finally, they follow the operational obligations, necessary to make the new structure concrete. These include:
- the appointment of the impact manager;
- the implementation of social and environmental impact measurement processes;
- the drafting of the first annual impact report.
These tools make it possible to transform the intentions stated in the statute into tangible and evaluable actions over time, ensuring consistency and transparency in the growth path as a Benefit Company.
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The 7 advantages for companies of becoming a Benefit Corporation
In a context where consumers, investors and talents lend increasing attention to environmental and social issues, adopting the legal form of a Benefit Company represents a strong sign of responsibility and commitment. The company thus demonstrates that Don't pursue profit as your only goal, but to want to actively contribute to well-being of people and territories with whom it operates.
Here are the main advantages that a company can obtain by choosing to become a Benefit Corporation.
1. Access to tax breaks and incentives
In some periods, the Ministry provides tax credits to support projects oriented to sustainability. In addition, some regions, such as Puglia, are creating dedicated registers that guarantee additional benefits and forms of rewards.
2. Protection in directors' decisions
The legislation protects directors in balancing economic objectives and common benefit objectives, giving them greater decision-making freedom even in the case of extraordinary transactions, such as sales or stock market listings.
3. Increased attractiveness for investors and shareholders
The legal commitment to generate positive impacts increases investor confidence, making the company more attractive for those looking for transparent and sustainable business models.
4. Strongest brand reputation
Working for the common good, as well as for profit, reinforces the corporate image and increases its credibility. This facilitates the acquisition of new customers and consolidates the relationship with existing ones.
5. Attracting new talent
The new generations favor realities with solid and clear values. Demonstrating a concrete social commitment helps attract qualified professionals, reducing turnover and improving the internal climate.
6. Increased interest from conscious consumers
The products and services offered by responsible companies find space more easily among consumers who are attentive to sustainability, local supply chains and social impact, thus expanding the potential customer base.
7. Easy access to private investment funds
The annual impact report transparently certifies the actions and results achieved, facilitating the work of investors and speeding up due diligence procedures.
