User:Kgoncalves10/sandbox

IRAC Scenario/ Example
Example of an issue:

Our company shares the same goals as a non-profit organization, but we also intend on making a profit.

Example of an answer:

ISSUE: Does the company need to file as a Benefit Corporation, or can they file as a C-Corps and receive the same benefits from Autism Speaks?

RULE: Generally, in the United States a Benefit Corporation is used “to merge the traditional for-profit business corporation model with a non-profit model by allowing social entrepreneurs to consider interests beyond those of maximizing shareholder wealth.”

Benefit Corporations aim to become profitable while simultaneously addressing both social, economical, and environmental needs. As of 2018, there were 33 states who recognized benefit corporations as a legal business form. There are some states that require a third party entity to certify the business as a Benefit Corporation, which often gets mistaken with the legalities of B Corp certification due to the resemblance in the values.

C Corporations are businesses that intend on raising their capital, which are filed as separate legal entities that have limited liability. Usually, C Corporations are defined as shareholder owned entities, as they require funds that are raised from VCs. Benefits of a c corporation include unlimited life and free transferability, in the sense that changes in ownership do not affect the transfer of shares.

ANALYSIS: Here, the company Piece and Harmony is providing clothing for the autistic community suffering from sensory issues, which falls under the Model Benefit Corporation Legislation specific benefit purpose of “[p]roviding low-income or underserved individuals or communities with beneficial products or services.”

CONCLUSION: Therefore, the company would be able to file as a Benefit Corporation given the specific legislation of the Benefit Corporations in the state of Massachusetts.

Neutral Voice Summary
An issue in deciding whether or not to become a Benefit Corporation is dependent on if a company wants to make a profit while simultaneously addressing both social, economical, and environmental needs, or operate without the need to benefit from the traditional for-profit business corporation model.

As a matter of law, in the 36 states who recognize this type of business form, a Benefit Corporation is used “to merge the traditional for-profit business corporation model with a non-profit model by allowing social entrepreneurs to consider interests beyond those of maximizing shareholder wealth.”

In this case, some authors have examined and pointed out that in the current 36 states who recognize benefit corporations as legal business forms the law regarding the requirement of certifications for operation differs from state to state. For example, in the state of Indiana, there is no requirement of certifications from a third party needed in order to operate as a Benefit Corporation. It has also been suggested that other organizations that choose to operate under the business formation of a Benefit Corporation may also want to engage in receiving a B Corp certification from a third party such as, B Lab.