The Maryland Benefit Corporation law, which went into effect last fall, recognizes a new corporate structure and reinforces a balanced way of doing business. Since then, we have been calling for some way to recognize and embrace LLCs working from a social benefit orientation. So I was really glad to have the opportunity to testify an option being considered in both state Senate and House committees last week.
I wanted to share with legislators what we’ve been seeing and say a bit about how filing as a Benefit LLC might affect my own business.
My business was formed to provide technical assistance to organizations serving public purposes. Filing as a Benefit LLC would not change fundamentally how or why ChangeMatters work and it would add new burdens of tracking and reporting. For now, the real value for a service business such as mine, is that the Benefit designation would recognize and honor our values and place us in the company of other “common good” enterprises.
The opportunity for the state–and for the country, however, is more sustainable local businesses, jobs, and tax and fee revenue. My prediction is that this designation will attract a lot of LLCs.
As for what we’ve been seeing (via a bunch of interviews, facilitation of four different public seminars with experts, and queries from no fewer than 9 state and county offices), it’s this: quiet and limited Benefit Corporation filings against a backdrop of wildly dynamic activity in the field of social enterprise and socially-responsible businesses nationwide and abroad.
• “Common Good Enterprise” activity is happening, but it’s disparate.
Small-scale double- and triple-bottom line operations are working in Maryland, but under different legal, tax, and certification structures and in different industries, such as agriculture, wellness, business services, food, law, workforce development.
• Other States are Experimenting with Hybrid Forms
Notably, Vermont, New Jersey, and soon Virginia, and possibly North Carolina. The Flexible Purpose Corporation is under consideration in California. The L3C, is recognized in at least 9 states and 2 tribal nations, and is being considered by Maryland legislature alongside the Benefit LLC.
• Relatively few companies are stepping up yet to file.
The legislation is being met with curiosity—and press coverage, but relatively few filings—the collective guess is 15 to 25. But thanks to inadequate tracking by the state agency that processes these filings, no one knows how many—let alone the social or environmental intentions.
Our colleague, Laura E. Jordan, suggests that “awareness will drive adoption.” And I agree. But along with that, we need some decent data for future analysis, training and information, incentives for businesses, input from social entrepreneurs and impact investors, and a focused strategy to embrace and support social enterprise and socially-responsible local business.