Public Benefit Corporations — Balancing Profit and Purpose

Public Benefit Corporations (PBCs) are a legal structure for startups that want to make money and make an impact. PBCs let you declare a public mission in your charter—like improving education, health, or the environment—without sacrificing your ability to raise capital.

Why it Matters

A Public Benefit Corporation (PBC) allows founders to legally pursue both profit and social impact. Unlike traditional C Corps that prioritize shareholder returns above all, PBCs build social mission directly into their legal DNA — which can attract mission-aligned investors, customers, and talent, but also creates additional reporting requirements and potential complexity.

Founders Checklist

Determine if your mission and business model align with PBC status
Identify a specific public benefit to include in your certificate of incorporation
Understand the "triple bottom line" approach (profit, people, planet)
Consider investor expectations and potential fundraising implications
Draft a certificate of incorporation that includes your public benefit
Plan for biennial benefit reporting requirements
Establish metrics to measure progress toward your stated public benefit

Founder Fails

Chose PBC structure without understanding reporting requirements > compliance headaches
Defined public benefit too narrowly > limited operational flexibility
Failed to communicate PBC status to investors > surprised and resistant VCs
Didn't measure progress toward stated benefit > difficulty demonstrating impact

When to ask for Help

If you’re torn between a nonprofit, PBC, or traditional C-Corp
When drafting your public benefit purpose and want it to be specific but flexible
Before talking to investors who might have questions about your structure
When unsure if your mission qualifies as a public benefit
If considering a switch from a traditional C-Corp to a PBC later

Frequently Asked Questions

Q: What exactly is a Public Benefit Corporation?

A: A PBC is a for-profit corporation that has a legal obligation to create public benefit and operate in a responsible manner. Directors must balance three considerations: shareholder interests, public benefit mission, and stakeholder interests.

Q: Can a PBC raise venture capital?

A: Yes. Many PBCs successfully raise VC funding, though some traditional investors may hesitate. Mission-aligned investors often prefer PBCs, and the structure can be attractive to impact investors.

Q: How is a PBC different from a B Corp certification?

A: PBC is a legal corporate structure, while B Corp is a third-party certification. You can be a PBC without B Corp certification, and vice versa — though many companies pursue both.

Q: Can an existing C Corp convert to a PBC?

A: Yes. Most states allow conversion with board approval and a supermajority shareholder vote (typically 2/3). The process involves filing amended articles of incorporation.