Allie Grace Garnett is a content marketing professional with a lifelong passion for the written word. She is a Harvard Business School graduate with a professional background in investment finance and engineering.
David Schepp is a veteran financial journalist with more than two decades of experience in financial news editing and reporting for print, digital, and multimedia publications.
A public benefit corporation (PBC) is a for-profit corporation with a stated public benefit included in its legal purpose. Unlike traditional corporations, PBCs must consider that purpose and the interests of other stakeholders, such as employees, customers, and communities, alongside the financial interests of shareholders. This structure allows businesses to pursue social or environmental goals while pursuing profits.
What must directors of a public benefit corporation consider?
Directors of a public benefit corporation must consider the companyâs stated public benefit and the interests of other stakeholders alongside shareholdersâ financial interests. Stakeholders may include employees, customers, communities, and the environment. This responsibility means directors must weigh how business decisions affect the companyâs broader mission rather than focusing exclusively on maximizing financial returns for shareholders.
How is a public benefit corporation different from a certified B corp?
A public benefit corporation is a legal business structure, while a certified B corp is a company that has received certification from the nonprofit B Lab. To become certified, a company must meet B Labâs standards for social and environmental performance, accountability, and transparency. A company can be both a PBC and a certified B corp, but the two designations arenât interchangeable.
Public benefit corporations (PBCs) are for-profit corporations structured to balance profit with a stated public benefit. Unlike traditional corporations, PBCs incorporate a social or environmental purpose into their business objectives, allowing them to pursue that purpose while generating profits for shareholders.
Rather than focusing solely on maximizing shareholder value, PBCs also consider how their decisions affect other stakeholders, which may include employees, customers, communities, and the environment.
Key Points
Public benefit corporations are for-profit corporations that also pursue a stated public benefit.
PBCs may be required to issue reports on their progress toward their stated public benefit.
A PBC is a legal business structure and differs from a certified B corp.
What is a public benefit corporation?
A public benefit corporation is a for-profit corporation that has a stated public benefit as part of its legal purpose. Its directors must consider that purpose and the interests of other stakeholders alongside the financial interests of shareholders.
Maryland became the first state to authorize benefit corporations in 2010. Delaware enacted its public benefit corporation law in 2013. Other states have adopted similar structures, although the terminology and requirements vary by state.
A public benefit corporation and a B corp arenât one and the same. A PBC is a legal business structure, while a B corp is a certification awarded by the nonprofit B Lab. To become certified, a company undergoes the B Impact Assessment, which evaluates its social and environmental performance, accountability, and transparency.
Public benefit corporations vs. other business structures
PBCs share some similarities with traditional corporations and nonprofit organizations, but have features that set them apart.
Business structure
Corporation
Public benefit corporation
Nonprofit organization
Purpose
Maximize shareholder value
Balance shareholder value with a stated public benefit
Advance a publicly stated mission
Business activities permitted
Unrestricted
Unrestricted
Must align closely with public mission
Reporting requirements
Vary by ownership and applicable law
Financial reporting requirements, plus benefit reporting as required by state law
Purpose. A corporation is a for-profit structure with a fiduciary responsibility to maximize shareholder value, while a nonprofit organizationâs purpose is to advance a mission for the public good. A public benefit corporation is for profit but not exclusivelyâit also commits to advancing a stated public benefit.
Why markets are so focused on shareholder value
Shareholder value refers to the financial returns generated for a companyâs ownersâits shareholders. Executives often prioritize shareholder value because a companyâs profitability and growth can affect its stock price and dividends. This focus is rooted in the belief that corporate leaders have a fiduciary responsibility to act in the best interest of shareholders, although some argue this responsibility should extend to other stakeholders as well.
Business activities permitted. Both traditional corporations and PBCs may pursue a generally unrestricted range of business activities, while the business activities of a nonprofit organization must be closely related to its public mission.
Reporting requirements. Publicly traded corporations, including publicly traded PBCs, must comply with Securities and Exchange Commission financial reporting requirements. Depending on state law, PBCs may also be required to issue a benefit report explaining how they are advancing their stated public benefit.
Tax benefits. Traditional corporations and public benefit corporations are not typically granted tax advantages. Nonprofit organizations are exempt from paying federal income tax, and donations to them are usually tax deductible.
Public vs. private PBCs
Whether a public benefit corporation is privately owned or publicly traded, its core objective is the sameâto balance profit with a mission-driven purpose. Publicly traded PBCs, unlike private entities, must comply with extensive Securities and Exchange Commission regulations.
10 examples of PBCs
Anthropic. Founded in 2021, the company behind the Claude AI assistant is a Delaware public benefit corporation. Its stated purpose is the responsible development and maintenance of advanced AI for the long-term benefit of humanity.
Bluesky. Started as a Twitter-funded project to develop an open, decentralized social media protocol, Bluesky later became an independent PBC and launched its own social network. Its mission is to develop technologies for open and decentralized public conversation.
Coursera (COUR). The online learning companyâs stated public benefit is to provide global access to flexible, affordable, high-quality education that supports personal development, career advancement, and economic opportunity. It incorporated as a PBC in 2021.
Kickstarter. The crowdfunding company became a PBC in 2015. Its commitments include supporting arts and culture, operating according to its stated values, and donating 5% of its after-tax profits to arts education and organizations addressing inequality.
Lemonade (LMND). An insurance company, Lemonadeâs business model incorporates charitable giving through its Giveback program, which directs money to causes selected by its customers.
OpenAI. The developer of ChatGPT reorganized its for-profit business as OpenAI Group PBC in 2025. Controlled by the nonprofit OpenAI Foundation, the PBC shares its mission of ensuring that artificial general intelligence benefits all of humanity.
Planet Labs (PL). This satellite-imaging company operates a fleet of Earth-imaging satellites. Its mission is to use space to help life on Earth by making global change visible, accessible, and actionable.
Veeva Systems (VEEV). A life sciences software company, Veevaâs stated public benefit includes providing products and services intended to make the industries it serves more productive and creating high-quality employment opportunities.
Vital Farms (VITL). The food company is committed to bringing ethically produced food to consumers, supporting farmers and employees, and serving as a steward of animals and the environment. It became a PBC in 2017.
Warby Parker (WRBY). A PBC since 2021, this eyewear company seeks to promote vision and eye health and support the communities where it operates.
The bottom line
A public benefit corporation structure gives a for-profit company a legal framework for pursuing goals beyond shareholder value. But the designation alone doesnât guarantee results. A PBC still has to demonstrate how its business decisions advance its stated public benefit.
This article was most recently revised and updated by Allie Grace GarnettThis article was most recently revised and updated by David Schepp
