Benefit Corporations Essay Example | Topics and Well Written Essays - 500 words

Benefit Corporations - Essay Example fit Corporations differ from other normal corporations based on the aspects of transparency in their operations, accountability to the state and specific purposes (Overton, et. al, 76). However, when it comes to taxation, there is no difference as they are all taxed in a similar manner. Benefit Corporations pursue a wide goals aimed at promoting the welfare of the society around it beside the profit-making motive. This separates them from other corporations that only focus only on maximizing profits to benefit the shareholders. The benefit corporations as opposed to other corporations are in a position to increase their fiduciary duty of their directors so as to have them consider non-financial stakeholders while at the same time their financial interests. Benefit Corporations have a number of provisions based on their purpose, accountability, transparency and right of action. The purpose of a benefit corporation to create a general public benefit. The directors are fully accountable to all the stakeholders of the corporation. Transparency in benefit corporations is ensured through publishing of annual Benefit Report that is delivered to all the stakeholders through the public website and circulars to all shareholders. The shareholders as well as the directors of Benefit Corporations have the right of action against violation of any of their duties. The structure of a benefit corporation is composed by a minimum status vote which is mainly a 2/3 in most of the states. Some of the benefits of a Benefit Corporation besides the general public benefit include improvement of human health, increasing the flow of capital to public entities to ensure proper benefit, preservation of the environment, promotion of economic empowerment to communi ties and individuals and provision of low-income individuals or communities with beneficial products and initiatives. Patagonia is among the first corporations to be registered in the state of California as a Benefit Corporation.