Many people start a business to monetize an idea -- provide a service or sell a product -- and maximize the returns. Publicly-held companies are in fact accountable to their shareholders and may be liable if they make decisions that don't maximize returns. Enter to "benefit corporation," a new form of corporation that grants the board of directors immunity from suits by shareholders if they justify that their decisions are "socially responsible" or fit into a pre-outlined list of beneficiaries. Unlike a charity or non-profit, there are no tax exemptions, but it does allow corporations that choose to resist takeovers and other mergers that, while objectively profitable, may not be to the founders' or board of directors' preference.
Notably, the infamously free-wheeling Ben & Jerry's ice cream company was purchased last year by Unilever; the offer was "sweet" enough that failure to sell the company would likely generate a lawsuit by the public shareholders that they were denied a substantial profit for no good business reason. And so a company that has a reputation for social activism and unconventional marketing is now owned and controlled by one of the largest consumer products corporations in the world. Ben & Jerry's representatives assured reporters that this sale never would have happened had a benefit corporation been an option at the time.
Notably, the infamously free-wheeling Ben & Jerry's ice cream company was purchased last year by Unilever; the offer was "sweet" enough that failure to sell the company would likely generate a lawsuit by the public shareholders that they were denied a substantial profit for no good business reason. And so a company that has a reputation for social activism and unconventional marketing is now owned and controlled by one of the largest consumer products corporations in the world. Ben & Jerry's representatives assured reporters that this sale never would have happened had a benefit corporation been an option at the time.
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