The difference between Certified B-Corporations and Benefit Corporations is often neglected, but is important to note how significant of a difference there actually is. A given business may be better suited to become a Certified B-Corporation, but may not have the correct understanding of this difference and will end up as a Benefit Corporation and vice versa. So what is the actual difference?

The main difference between these two types of incorporation methods lies in the performance monitoring characteristics. In a Certified B-Corporation, the business needs to score a minimum of 80 out of 200 on B Lab’s “B Impact Assessment,” an all-encompassing assessment that of the business’s level of social and environmental performance. Contrarily, a Benefit Corporation is only required to compile their progress in social and environmental performance into a formal report. There is no requirement for review of this report by any organization.

Another aspect of this difference is the level of interfacing with B Lab, the non-profit organization that has developed the guidelines for social and environmental performance. A Certified B-Corporation has access to a variety of resources that B Lab is able to provide regarding funding provisions, marketing, and developing relationships with other Certified B-Corporations. Benefits Corporations are not afforded this luxury.

Finally, Certified B-Corporations have much more flexibility as they are recognized as a viable certification in all 50 states. Benefits Corporations are only recognized in 26 states and the District of Columbia.

It is important to do careful research regarding a business’s alignment with these two incorporation methods before making any decisions. With the correct understanding of a business’s goals and what their business plan is able to do for the community, there is no need to stray from the correct path.