Guide to Alabama Benefit Corporations _Part2
Guide to Alabama Benefit Corporations_Part3
Guide to Alabama Benefit Corporations _Part4
Guide to Alabama Benefit Corporations _Part5
Guide to Alabama Benefit Corporations _Part6
Guide to Alabama Benefit Corporations _Part7
The Rockridge® Guide to Alabama Benefit Corporations
Wanting to know more about Alabama Benefit Corporations?
…because you want to lock in your profitable purpose as you grow?
…because you want to brand and capture public goodwill as a benefit company?
…because you want to attract top-notch talent as you scale?
…because you want to grow a relevant, scalable, and sustainable enterprise?
Then this guide’s for you!
Fundamentals of Alabama Benefit Corporations
B Corps aren’t Benefit Corporations (necessarily) – Certified B Corps are companies audited by the nonprofit B Lab and validated to be good corporate citizens with triple bottom line business models. They get to brand themselves with the B Corp trustmark, similar to the way buildings can certify as LEED and chocolatiers as Fair Trade. In many states, B Lab requires corporations seeking to become Certified B Corps to convert to benefit corporations under their respective state laws. However, LLC’s and even sole proprietors can become Certified B Corps.
Sweet Home Alabama – Alabama Benefit Corporations are governed under Alabama state law – not Delaware, not Federal, not Tribal – this is a southern thing, honey! Make sure you are following the Alabama statute, for instance how and when to publish your required impact reports.
Berries and Berries to the IRS – Your Alabama Benefit Corporation is treated like a typical corporation for tax purposes. There are no magic tax breaks here, but your accountant can guide you on what impact expenses may be deductible to a Benefit Corporation that otherwise aren’t connected to the purpose of a standard corporation.
Roll Tide – An Alabama Benefit Corporation can’t just file its benefit documents and call it a day. The Board of Directors must ensure the company rolls its early initiative forward into decisions that further the public benefit(s) identified in its incorporating and governing documents.
War Eagle Fearless and True – Alabama Benefit Corporations must be transparent in the actions they take in furtherance of their stated mission, including publishing periodic reports on what they’re doing to advance benefitted groups and/or causes. Let them know how fearless and true you really are.
Statutory Sections that Matter
A selection of requirements that prospective Benefit Corporations should consider:
Notice. An Alabama Benefit Corporation is formed under the Alabama Benefit Corporation Act. Under the Act, the Certificate of Incorporation must include a statement that the corporation is subject to the Benefit Corporation chapter of the corporation law. The name of a Benefit Corporation must contain the words “benefit corporation”, the abbreviation “B.C.” or the designation “BC”, and may not use the word “incorporated” or an abbreviation thereof.
Conversion. An Alabama corporation cannot convert to a Benefit Corporation without two-thirds approval of its shareholders. Similarly, termination of Benefit Corporation status by vote or acquisition requires two-thirds shareholder approval.
Operations. Directors of an Alabama Benefit Corporation must consider not only shareholders, but also employees, suppliers, community, and the environment in performing their duties. Directors must also act in a responsible and sustainable manner, which essentially means creating a positive effect on society and the environment dictated by the company’s size and nature of business.
Transparency. In Alabama, public benefit means a positive effect, or reduction of negative effects, on one or more communities or categories of persons (other than stockholders solely in their capacity as stockholders) or on the environment, including effects of an artistic, charitable, economic, educational, cultural, literary, medical, religious, social, ecological, or scientific nature.
Compliance. An Alabama Benefit Corporation must prepare an annual benefit report that is to be distributed to shareholders and posted on its website.
Alabama Benefit Corporation Resources
An Entrepreneur’s Guide to Going “B” by Center for Business and Environment at Yale
An Investor’s Guide to B Corps by Center for Business and Environment at Yale
Better Business by Chris Marquis
Benefit Corporation Law and Governance by Fredrick Alexander
How are B Corps and Public Benefit Corporations Related? by Rockridge Venture Law
Rockridge® Guide to Southeastern Benefit Corporation Statutes by Rockridge Venture Law
The Delaware Public Benefit LLC: Use it to Become a “Benefit Company” in Your State by Rockridge Venture Law
About Kevin Christopher
Kevin is the founder and principal of Rockridge®, a 4x B Corp Best For The World and Real Leaders Top 150 global impact company. He is annually recognized as a SuperLawyer, and has received numerous professional awards ranging from Conscious Company Magazine’s Top Business Leader to the Federal Lab Consortium’s technology license Deal of the Year. He has been profiled in B the Change, Forbes, the Los Angeles Times, Sustainable Brands, and many other media outlets highlighting sustainability and technology leaders. He is widely recognized for his thought leadership and initiatives at the nexus of impact and innovation.
Impact + Innovation Credentials
An entrepreneur-attorney, Kevin’s recently founded Quantiscope, a BARDA DRIVe accelerator launched AI company advancing ML enterprise models for drug discovery, as well as climate tech Calliope Bio, a computational synthetic biology company launched from the Nucleate Activator and advanced through the Berkeley Skydeck accelerator. Kevin’s entrepreneurship career began with Resolute Therapeutics, a CARB-X awardee developing a novel class of broad spectrum antibiotics.
As an ESG leader, Kevin is a 2050 Fellow at the Yale Center for Business and Environment (CBEY), and select member of the World Economic Forum’s Crypto Sustainability Coalition. Kevin founded Tennessee’s local B Corp network B Tennessee and served as sponsoring counsel to B Academics.
With a background in public-private partnerships, Kevin is a National Institutes of Health (NIH) RadX faculty member, and National Science Foundation (NSF) program evaluator for the Center for Bioplastics and Biocomposites (CB2) as well as the Carnegie Mellon Center for Quantum Computing and Information Technologies (Q-CIT).
. Kevin’s practice areas include:
- patent and trademark prosecution, licensing and litigation;
- corporate law, with an emphasis on benefit corporations, socially responsible businesses and high-growth emergent companies;
- government contracts, with an emphasis on innovation funding;
- corporate and investor financing; and,
- technology commercialization.
To meet with Kevin Christopher, schedule an appointment through Calendly or email him directly at email@example.com.