Public Benefit Companies

A Public Benefit Company (PBC) is a specific type of corporation that is legally committed to balancing profit-making with broader societal or environmental objectives. It is typically established under laws that allow businesses to pursue objectives beyond maximizing shareholder profits, which is the traditional mandate of a corporation.

Key Characteristics of Public Benefit Companies:

1. Dual Purpose:
   PBCs are structured to serve both their financial bottom line and a public benefit purpose, such as environmental sustainability, social equity, or public health. This dual mission is often codified in their corporate charter.

2. Accountability and Transparency:
   - They are required to regularly report on their progress toward achieving their public benefit purpose.
   - Stakeholders, beyond shareholders, often have some legal standing to hold the company accountable.

3. Governance:
   Boards of directors in PBCs must balance the interests of shareholders with those of the broader public and the specific mission outlined in the company’s charter.

4. Legal Framework:
   PBCs are recognized in jurisdictions like the United States (especially under Delaware law, which is influential in corporate governance). They are sometimes referred to as B Corporations, though “B Corp” is technically a certification offered by a nonprofit (B Lab), while “Public Benefit Company” refers to the legal structure.

Equivalent in France: The Entreprise à Mission

France does not have an exact equivalent to the U.S. Public Benefit Company but has a similar framework in the Entreprise à Mission introduced by the Pacte Law (Loi Pacte) in 2019.

Key Features of the Entreprise à Mission:

1. Purpose Statement:
   - The company must define its “raison d’être” (reason for being), which is its core purpose beyond profit.
   - This statement is included in the company’s bylaws (statuts).

2. Specific Objectives:
   - The company must identify social or environmental objectives that it will pursue in alignment with its purpose.

3. Monitoring and Accountability:
   - A monitoring committee (comité de mission) oversees the company’s progress toward its objectives and ensures accountability. This committee typically includes external experts and representatives of various stakeholders.
   - The company must also appoint an independent third-party auditor (organisme tiers indépendant) to verify its claims and performance regarding its mission.

4. Legal Recognition:
   - An Entreprise à Mission retains its legal structure as a Société Anonyme (SA), Société par Actions Simplifiée (SAS), or another form of company under French law. However, the mission designation introduces a new layer of accountability.

Comparison: Public Benefit Company vs. Entreprise à Mission

Aspect	Public Benefit Company (PBC)	Entreprise à Mission
Jurisdiction	Predominantly U.S.	France
Legal Basis	Specific statutes, e.g., Delaware law	Pacte Law (2019)
Purpose	General public benefit + profit	Defined raison d’être + profit
Accountability	Reports to shareholders and stakeholders	Comité de mission and third-party audits
Mission Codification	Integrated into corporate charter	Included in company bylaws

Broader European Context

Other European countries are introducing similar models:
- United Kingdom: The concept of a “Community Interest Company (CIC)” parallels a Public Benefit Company by focusing on delivering social benefits.
- Germany and the Nordics: The focus is often on corporate social responsibility (CSR) embedded in traditional company law rather than separate legal designations.

France’s Entreprise à Mission provides a robust and structured approach to integrating public benefit objectives into the corporate legal framework, making it one of the most analogous models to the U.S. Public Benefit Company.

Examples

• https://github.com/OpenCoreVentures/ocv-public-benefit-company

Page last modified: 2024-11-18 15:42:08