For a very long time, the two choices that for-profit enterprises had when choosing an entity form in Virginia was the corporation and the limited liability company (LLC). Starting July 1st, Virginia is adding a choice for those entrepreneurs that want to have a for-profit entity but also want to be able to support a social mission with some of their profits. This new entity is a type of stock corporation called a “benefit corporation.”
On March 26, 2011, the Governor signed into law House Bill 2358, which added an article to the Virginia Code, title 13.1. Under this new law, a corporation can elect to be a “benefit corporation” by so stating in its Articles of Incorporation (or amended Articles if transitioning from a stock corporation to a benefit corporation) and by stating the general public benefit that it will be providing. Once complete, the benefit corporation can legally use part of its profits to support its stated general public benefit purpose.
This new form of entity is perfect for entrepreneurs that want to blend non-profit and for-profit activities and create a hybrid that allows them to make money and do good at the same time. If you would like my help forming your benefit corporation correctly, please visit my benefit corporations page on my web site.