I’ve written about Louisiana Benefit Corporations before, and recently I had the opportunity to look at the business structure more in-depth. At this point, there are really only two main advantages to the Benefit Corp: marketing and reduced liability.
Show me a corporation that doesn’t want to be considered socially responsible, and I’ll show you a Saints fan who also cheers for the Falcons. Every business wants to show much they care for their community, the environment, and anything but profits. The B-Corp structure helps achieve that goal. It also helps the business qualify for B-Corp Certification from the B Lab.
In a traditional corporation, the officers and directors have a fiduciary duty, imposed by law, to only consider the well-being of the shareholders when making a decision. A B-Corp expands this duty by forcing the officers and directors to consider many other factors, such as the shareholders; the employees, its subsidiaries, and its suppliers.; the interests of customers; community and societal factors; the local and global environment; the short-term and long-term interests of the benefit corporation; and the ability of the benefit corporation to accomplish its public benefit.
By expanding the factors that a director may consider when making a decision, the law makes it harder to prove that a director has acted outside of their fiduciary responsibility.
So far, the IRS has not commented on whether or not Louisiana Benefit Corporations will receive special tax status (unlike the L3C), although that may come in the future. If you considering starting a new business in Louisiana, and you’re not sure if you should go with an L3C or Benefit Corp, make sure to discuss the possibilities with not only an attorney, but your tax advisors as well. These new structures are similar, but both have different advantages and disadvantages that you will need to consider.