Types of Social Impact Company Descriptions
A social enterprise is an organization or initiative that marries the social mission of a non-profit or government program with the market-driven approach of a business.
B Corp certification (also known as B Lab certification or B Corporation certification) is a private certification issued to for-profit companies by B Lab, a global non-profit organization. Certification is a third party standard requiring companies to meet social sustainability and environmental performance standards, meet accountability standards, and to be transparent to the public according to the score they receive on the assessment. B-Lab certification applies to the whole company across all product lines and issue areas. For-profits of all legal business structures are eligible for certification.
In the United States, a benefit corporation is a type of for-profit corporate entity, authorized by 30 U.S. states and the District of Columbia  that includes positive impact on society, workers, the community and/or the environment in addition to profit as its legally defined goals. Taxation and profit are the same for C corporations and benefit corporation, their difference is in transparency, accountability and purpose.
Social Purpose Corporation
In 2012, Washington state created a new entity, Social Purpose Corporation, for organizations who want to be benefit corporations. This law allows a corporation’s shareholders and directors to put a social purpose (such as saving the environment or saving the elephants) above the purpose of making a profit. A social purpose corporation (an “SPC”) is a Washington corporation that has organized itself to pursue one or more social purposes.
This is done by defining the following in your Articles of Incorporation:
- A corporate name that contains the words “social purpose corporation” or “SPC”;
- A statement that the corporation is organized as a social purpose corporation governed by the Social Purpose Corporation Chapter of Title 23B RCW;
- A statement setting forth the general social purpose or purposes for which the corporation is organized pursuant to Section 3 of the Act (Section 3 says that “[e]very corporation governed by this chapter must be organized to carry out its business purpose under RCW 23B.03.010 in a manner intended to promote positive short-term or long-term effects of, or minimize adverse short-term or long-term effects of, the corporation’s activities upon any or all of (1) the corporation’s employees, suppliers, or customers; (2) the local, state, national, or world community; or (3) the environment.”)
Low-Profit Limited Liability Company (L3C) definition
An L3C is a for-profit, social enterprise venture that has a stated goal of performing a socially beneficial purpose, not maximizing income. It is a hybrid structure that combines the legal and tax flexibility of a traditional LLC, the social benefits of a nonprofit organization, and the branding and market positioning advantages of a social enterprise. The L3C is obligated to be mission-driven so there is a clear order of priorities for its fiduciaries.