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Get financial and legal protection always! Invest in business with benefit corporation California

Author: Becki Ueno
by Becki Ueno
Posted: Mar 10, 2016

A new type of business entity that is taking over the corporate world, speedily, is the benefit corporation. All jurisdictions have different set of legislations that the judicial system is stringent about. Business judgments, traditionally, were based on the basis of these legislations, but now things are changing. The benefit corporations cannot just focus on the client, business organization or the share holders, who pass the verdict, they have to now take a decision that does not have any kind of negative impact on the society and the environment. The planet as a whole has to be accounted for, so the legislation model has to account and analyze its weaknesses and governance issues in totality, keeping all the parameters in mind.

Investment decisions are now based on annual benefit reports that have been influenced by the social environment rather than a handful of people who are directly benefiting from the deal. The deals are struck quickly and the investments can be made with diligence and speed. Businesses now focus to make an impact on the society as well as their shareholders making the planet a better place to live in.

These firms now recognize that profits are not the end gain of every liquidity and sale scenario. Earlier the corporate houses had no other business focus, but gathering profits for the investors and shareholders in the past. Morality and society took a back seat. Now benefit corporation legislations permit the corporate houses to focus on society, environment and profits side by side.

The Benefit Corporation California helps conjure up a novel and important corporate structure that falls in with the needs of the investors and business leaders, and at the same time they are totally focused towards a good impact on the environment and society. In a desperate sale or liquidity situation, Social innovation and general environment can be used positively, just deal with the legal obstacles that prevent the investors from taking the right decisions.

The business board obligations increase and they have to keep social and environmental factors in mind along with the financial needs of the shareholders, before they take a decision. The executive people of the business can now go after a mission and they have legal protection on their side provided they keep the societal needs in mind.

The non-financial and financial decisions can be balanced when you follow the rules of the benefit corporation. The Director liability towards the shareholders is reduced greatly if the decision is made for trade or sale purposes. The stock holder rights are expanded in case of a benefit corporation scenario. The impact investors can relax a little more as they know that they have invested their hard earned money in a benefit corporation that is focused towards its future mission but they still have a say in decision accountability.

Highly respected companies are already marching the path of benefit corporations and your small company can also be a part of this innovative and challenging movement of working indirectly for the society. The employees of the firm are also ensured of the legal commitment of the company to its mission. Reading the benefit corporation status of your company, will make it attractive to customers and investors, after all they want financial safety, transparency in dealings, accountability of actions and proper legal protection.

About the Author

Sustainable Law Group is certified B Corp attorney serving profit, non-profit and social enterprises with legal support in West LA, South Bay and El Segundo in Los Angeles.

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Author: Becki Ueno

Becki Ueno

United States

Member since: Dec 04, 2015
Published articles: 7

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