A new corporate form to enable purpose-driven business in Australia
 
 

B Lab Australia & New zealand is advocating for the introduction of a new corporate form in Australia known as

The Benefit Company

The Benefit Company is a new ‘opt-in’ legal form, which when passed by the Australian Government, will involve a minor amendment to the current Australian Corporations Act 2001 to recognise and enable purpose-driven businesses to scale and prosper.

 
 
 

Benefit Company overview

The Benefit Company is a proposed new ‘opt-in’ legal company form. It will offer entrepreneurs and investors a legal framework to build and invest in businesses that meet higher standards of corporate purpose, accountability, and transparency.

Below are the additional obligations Benefit Companies will have. Importantly, there are no changes to other obligations under the existing Corporations Act.

Redefined Company Purpose

Benefit Companies will be required to including a binding corporate purpose in their constitution requiring the company to create a material positive impact on society and the environment (known as ‘general public benefit’) in addition to being financially successful.

Expanded Director Duties

The duties of the directors and officers will be redefined to require them to consider the interests of non-financial stakeholders in addition to the financial interests of shareholders.

Requirement to Report on Purpose

The company must report annually on overall social and environmental performance using a third party standard.

What's the difference?

Certified B Corporation

B Corporation certification is a tool for companies to measure and manage their impact

Benefit company

The Benefit Company is a proposed new company form in Australian law

 

Why we need it

This change will provide certainty and clarity for directors to be able to make long-term decisions that benefit ALL stakeholders (employees, customers, community, suppliers and the environment) as well as shareholders.

It will also help the purpose-driven business movement to scale, by redefining how we measure success in business.

 

director protection

The Benefit Company will provide legal protection for directors who wish to make decisions that may not be financially advantageous to shareholders but are consistent with the company's expanded purpose of creating value for stakeholders. This aims to encourage directors to make decisions in line with shared value and responsible profit generation.

 

attracting investment

Being a Benefit Company will encourage impact investment by providing certainty that the company will remain accountable to its mission in the future. In Australia, the market for impact investing is expected to reach $32 billion over the next decade. 

mission alignment

The Benefit Company will enable a company’s mission to be embedded into its constitution, creating a framework that enables directors to stay mission-driven through corporate succession, capital raising, and changes in ownership.

 

Cultural change

There is global cultural shift underway that is transforming our vision of the purpose of business, from only maximising shareholder value to a new vision that the purpose of business is to maximise value for society. Introducing the benefit company will help change the relationship between business and society and the way ‘success’ is defined in business.

 
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The usa and italy have passed this law. It is being considered in the UK, Canada, Argentina, Colombia and Taiwan 

34 

states in the usa have passed the law

5.4k

benefit corporations in the USA

 

"There's no downside to it. You're just aligning your intention, the philosophy of your business, from the very beginning, around a public good. That's something every company can do"

Yancey Strickler, CEO, Kickstarter

 

 
 

Supporters

 
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Allan English, founder and executive Chairman, silver chef group

"By opting to become a benefit company, businesses like Silver Chef will be able to create a solid foundation for long term mission alignment and therefore continue to build a sustainable business which maximises value for both shareholders and society."

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phil vernon, managing director, australian ethical

"The benefit company embodies a sustainable approach to business which recognises the responsibility of companies to their many stakeholders, from shareholders, employees and customers through to society-at-large."