Public benefit corporation (PBC)
A for-profit corporation with a public benefit in its charter and a board bound to balance it — taxed like any corporation.
A public benefit corporation is a for-profit corporation whose charter names a public benefit, and whose board must balance the stockholders' financial interests against that benefit and the interests of the people its conduct affects. It reports to stockholders on the benefit at least every two years.
For tax it is a corporation like any other: a C corporation filing Form 1120 unless it elects S status. The mission changes the board's duties, not the return. Nor is it a certified "B Corp", which is a private certification any entity type can seek.
Public benefit corporation
- Good at
- The mission is a legal duty, not a slogan.
- Raises money and grants options like any corporation.
- Watch for
- A benefit statement to stockholders at least every two years.
- The board's balancing duty applies to every decision, a sale included.
- Best for
- A venture-backed company that wants its mission in its charter.
Ordinary C corporation
- Good at
The default every investor document assumes.
- Watch for
The mission lives in policy, not the charter.
- Best for
- Most startups.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Background reading explains; it is never the authority for a rule. Anything marked as a convention is ours, not the rule-maker's.
- State authority
- 8 Del. C. §362(a) (opens in a new tab)Public benefit corporations, and the biennial statement §366(b) requiresFree to read
- Background reading — not an authority
- Wikipedia, “Benefit corporation” (opens in a new tab)Benefit corporationFree to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Public benefit corporationA for-profit Delaware corporation formed to produce a public benefit named in its charter, whose board must balance the stockholders' financial interests, the interests of those its conduct materially affects, and that benefit. Reports to stockholders on it at least every two years; taxed like any other corporation
- C corporationA corporation taxed as a taxpayer in its own right: it files Form 1120 and pays 21% of its taxable income, and its shareholders are taxed again on what it pays them as dividends. Every corporation is a C corporation unless it elects S status