A Florida benefit corporation is a relatively new entity that is available for companies that benefit the public.
Under Florida state law, a Florida benefit corporation must have “a material, positive effect on society and the environment, taken as a whole.”
This type of corporation was only recently created in Florida in 2014. The goal is to allow companies to focus on charitable causes and the betterment of society or the environment.
If you would like to form an organization for social or environmental purposes, you may wish to consider a Florida benefit corporation. Here, we will discuss the advantages of a Florida benefit corporation, as well as how to form one.
Florida benefit corporations were created to give business leaders a middle path between tradional for profit corporations and not for profit corporations.Florida Business Attorney Ashley Brewer
Advantages of a Florida Benefit Corporation
The main advantage of a Florida benefit corporation is that board members receive protection from lawsuits for considering things beyond the interests of the stockholders. In a traditional corporation, the interests of the stockholders are paramount. In a benefit corporation, the board can consider their stated social or environmental cause when making decisions.
Additionally, Florida benefit corporations are eligible for certification by B Lab, a global nonprofit organization aimed at promoting the highest standards of social and environmental performance, public transparency, and legal accountability.
While certification requires paying an annual fee and re-certifying every 3 years, Certified B Corporations are permitted to use the “Certified (B) Corporation” logo. However, certification is not a requirement to maintain a Florida benefit corporation.
What Are the Requirements of a Florida Benefit Corporation?
There are three key characteristics of a Florida benefit corporation.
1. The Corporation Is Designed to Engage in Specific Benefit Activities.
A benefit corporation must generally have a positive impact on society. The benefit corporation may also outline specific public benefits in its Articles of Incorporation that it wishes to focus on.
2. The Officers and Directors Have a Statutory Mandate to Consider the Corporation’s Public-Benefit Goals.
Instead of just considering the interests of its shareholders, as noted above, the officers and directors of a benefit corporation must keep their stated public benefit in mind when making decisions. This can be considered the primary advantage, as most incorporators will want to focus on their cause during the life of their business.
3. The Corporation Must Make a Mandatory Annual Report to Its Shareholders Discussing Its Efforts Toward Its Public-Benefit Goals.
This is more than just a financial annual report. This annual report considers everything the corporation did during the year in furtherance of its charitable goals.
How to Become a Benefit Corporation
The process of filing as a Florida benefit corporation is very similar to starting a regular C Corp or S Corp in Florida.
1. Choose a Business Name.
The name for your corporation must be unique. You can search for a corporate name on the Florida Division of Corporations’ website.
2. File Your Articles of Incorporation.
You will then file your articles of incorporation with the State of Florida. Your articles will give important information about your benefit corporation to the state, such as:
- The business name, including a business designator like “Inc.” or “Corp.”;
- Principal and mailing address;
- General and/or specific public benefit;
- Shares of stock;
- Registered agent information;
- Name and address of the incorporator; and
- Optional information about benefit directors and officers, as well as benefit director qualifications, if any.
3. Draft Bylaws.
Your Florida benefit corporation will need a set of bylaws to detail information on the board of directors, meetings, and stock information, among other things.
4. Keep Up With Your Annual Reports.
As discussed above, the specific requirements for a Florida benefit corporation annual report are different than the requirements for a for-profit corporation. After your benefit corporation is formed, make sure to keep up with your annual report filing every year.
Additional Details About Your Florida Benefit Corporation
Benefit corporations in Florida can elect to be taxed as a C Corp or S Corp, just like all other corporations in the state.
You may notice several marketing and human resource benefits to having a Florida benefit corporation, such as:
- Attracting talent in line with your cause,
- Maintaining employee engagement over time, and
- High-speed growth because of your appeal to social consciousness.
Overall, a Florida benefit corporation can be a wonderful way to make a contribution to society or the environment.
If you are considering starting a Florida benefit corporation, BrewerLong can help. This type of corporation is an immensely fulfilling way to do business. For any questions or help getting started, give us a call at 407-660-2964 or contact us online.