L3C

“The Way We Think About Charity is Dead Wrong” by Dan Pallotta

Many people have a misconception about fundraising costs and charitable giving.  Too many donors ask to see the numbers on a charity’s overhead and how much of their donated dollar will be spent “on the ground” without also asking about the overall impact of an organization.  This thinking, among other myopic views about charity, is …

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Capital and Control: The final two considerations for determining legal structure for your Social Enterprise.

You want to make a change with your new business venture and you’re ready to file the necessary paper work to form a legal structure, but what type of legal structure should you form?  Because your idea combines for-profit considerations and nonprofit motives, you’re a little confused about whether you should form a nonprofit, a …

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The Latest on Washington State’s Social Purpose Corporation – Is Seattle the Capital for Social Entrepreneurship?

Over the course of my routine internet reading this past week, I came across a large number of blogs and stories regarding the Social Purpose Corporation and some creative ways to use the legal structure.  So I thought I would share. Seattle Social Purpose Corporation Meetup First, I should note that there’s a meetup in …

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The Difference Between a Benefit Corporation and a (certified) B-Corp

I’m often asked:  What’s the difference between a benefit corporation and a B-Corp, are they the same thing? No, these are not the same thing.  The benefit corporation is a legal structure available for incorporation in several states,[1] whereas a B-Corp is a certification granted by B-Labs, a Pennsylvania nonprofit corporation.  Think of benefit corporations …

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Why the Social Purpose Corporation is Necessary: Self-identification and Legitimacy.

Effective today, Washington will recognize a new corporate entity: the social purpose corporation.  You can learn more about this legal structure here and here (or even download the legislation’s text here).  The social purpose corporation (or SPC) is Washington State’s social enterprise; its version of the benefit corporation that has been adopted by several other …

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Are the managers of traditional corporations “really” required to maximize profits to shareholders? A review of eBay v. Craiglist et al, in the argument supporting “hybrid” social enterprises.

Over at her blog Razesquire, Karen Raz asked an interesting question summarized as follows: where in the law does it say that traditional corporations must pursue a duty to maximize profits at the expense of social and environmental considerations? Although proponents of hybrid entities (benefit corporations, social purpose corporations, etc.) will tell you that management …

Are the managers of traditional corporations “really” required to maximize profits to shareholders? A review of eBay v. Craiglist et al, in the argument supporting “hybrid” social enterprises. Read More »

Why a start-up should use an attorney to help form their business structure from “This Week in Startups”

Here’s a question I often get: should I use an attorney when first form my company, or should I go with a web-based service, or should I do it myself? Typically, I’d recommend that you use an attorney. Web-based products tend to shoehorn young companies into a corporate structure that doesn’t make sense and they …

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Benefit Enforcement Proceedings for the Benefit Corporation– What are they and How will they work?

As more and more states enact legislation authorizing Benefit Corporations, more questions will be asked about the form and function of these hybrid entities.  Nowhere are these questions more evident than when examining the dispute resolution process set forth in the various state statutes. A quick primer.  Benefit Corporations are designed to allow a corporation …

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The Washington State Senate approves of the “Social Purpose Corporation”

   Today, the Washington State Senate approved a bill that would establish the Social Purpose Corporation by a vote of 34 to 14 with 1 excused.  The bill was passed by the House of Representatives last month, as I wrote about here, and it now only needs approval by Governor Gregoire to become law.  Washington …

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Mission and Market, the First Two Considerations for a Start-up Social Venture

You’re fed up. There’s a social problem that you can’t stand. It seems imminently solvable if only someone would take the initiative to get it done. So you’ve made up your mind: you’re going to solve this problem by starting a business. You’ll immediately face an important decision. Is your business going to be a …

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