Is a Delaware Public Benefit Corporation Different Than a Non-Profit?
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Delaware Public Benefit Corporations are different than non-profit organizations in that non-profit organizations typically operate for a charitable purpose, and therefore qualify for tax-exempt status from the IRS.
Non-profit organizations do not have shareholders, and if there is a Board of Directors, the Board cannot seek or reap any private benefits from the activity of the company.
A Delaware Public Benefit Corporation, on the other hand, is expected and encouraged to earn profits; it is also owned by its shareholders and cannot apply for tax-exempt status.
Although Delaware Public Benefit Corporations have existed for less than eight years, there is already a small but impressive roster of Delaware Public Benefit Companies, including:
- Kickstarter: a global community dedicated to supporting artists of all kinds and helping them find the resources and support they need to create their original projects. Kickstarter, one of the leading crowdfunding platforms, recently amended its Charter page when it reincorporated as a Public Benefit Company.
- Laureate Education, Inc.: Laureate purports to be "the largest global network of degree-granting higher education institutions and the largest company to become a Public Benefit Corporation." Laureate offers an array of undergraduate and graduate degrees via online, on-campus and hybrid programs, and is dedicated to serving not only its students across the world but also the world in which they live by becoming a Delaware Public Benefit Corporation.
- Method: the environmentally-sound, cruelty-free, pet-safe, child-safe, fuel-efficient, green-sourced soap and cleaning product company called method reincorporated as a Delaware Public Benefit Corporation in August of 2013, the first month it was legal to do so. The company, which is the most dominant ecological cleaning supply company in America, embraced this corporate structure so it could "balance profits with environmental and social responsibility."