What Is a B Corporation?

B Corp Is a Private Certification, Not a Legal Status

A B Corporation, more precisely a Certified B Corporation, is a certification granted by B Lab, a nonprofit organization, to companies that meet its standards for social and environmental performance. This is fundamentally different from forming an LLC or a corporation with a state, or from electing a tax status with the IRS: no government agency grants, tracks, or regulates B Corp certification, and it creates no new legal entity or public filing.

The B Impact Assessment and Certification Requirements

To become certified, a company completes the B Impact Assessment, which evaluates its practices and performance across areas including its treatment of workers, its impact on the community and environment, its governance, and its customers. A company must achieve a verified score of at least 80 points on a 200-point scale to qualify. Beyond the score, B Lab also requires the company to formally amend its governing documents, articles, bylaws, or operating agreement, to commit to considering the interests of workers, community, and the environment alongside shareholders in its decision-making.

Recertification Every Three Years

Certification isn't permanent. A Certified B Corporation has to go through B Lab's recertification process roughly every three years to confirm it still meets current standards, and it pays an annual certification fee generally scaled to its revenue. Companies certifying from 2026 are assessed against B Lab's updated standards, meaning the specific bar for certification can shift over time as B Lab revises its framework.

Benefit Corporation: A Different, State-Law Thing Entirely

A benefit corporation is a separate concept: a specific legal entity type created by state statute, not a certification. Maryland became the first state to adopt benefit corporation legislation in 2010, and many other states have since adopted similar statutes. A benefit corporation is required by its state's law to pursue a general public benefit (and often a specific one it identifies), and its directors have an expanded, legally protected ability to weigh factors beyond shareholder value, such as employees, the community, and the environment, when making decisions. Unlike B Corp certification, forming a benefit corporation does involve a state filing, since it's an actual entity type (or a modification of the standard corporate form) recognized under that state's corporation statute.

Can a Company Be Both?

Yes, and many are, but they're independent of each other. A company can be a legal benefit corporation under its state's statute without ever pursuing B Corp certification from B Lab, and a company can be B Corp certified while remaining an ordinary corporation or LLC under state law, with no benefit corporation statute involved at all. Being one doesn't require or guarantee the other.

Which Entity Types Can Pursue B Corp Certification

B Corp certification isn't limited to corporations. An LLC, a C corporation, an S corporation, or a benefit corporation can all pursue certification, as long as the company meets B Lab's assessment score and governance requirements. The certification evaluates the business's practices and impact, not the specific legal structure it operates under.

Certification Doesn't Change Your Tax or Liability Treatment

Becoming a Certified B Corporation doesn't change how your business is taxed or how liability protection works for its owners; those depend entirely on your actual legal entity type and any tax elections you've made, which certification leaves untouched.

Certification Costs Scale With Revenue and Recur

Budget for both the initial certification process and the recurring annual fee, which is generally tied to company revenue, plus the time and cost of preparing for recertification every three years. This is an ongoing commitment, not a one-time badge.

Don't Confuse the Two Terms in Your Own Marketing

Because "B Corp" and "benefit corporation" sound similar and are often conflated even by business owners, be precise in your own communications about which one, if either, actually applies to your company. Claiming benefit corporation status without the underlying state filing, or vice versa, can create confusion with customers, investors, or regulators.

This Is Not Legal Advice

Whether B Corp certification, benefit corporation status, both, or neither fits your business depends on your goals and your state's specific statute. Talk to a business attorney if you're considering converting to or forming as a benefit corporation under your state's law.