Page 109 - Social Enterprise A New Business Paradigm for Thailand

Companies (L3Cs), a hybrid structure designed to bridge the gap between nonprofit and for-profit
goals, enabling L3Cs to attract investment while committing to a primary mission of public benefit.

These new models mark a shift toward aligning business operations with broader societal goals

while providing legal protections for companies that choose to prioritize more than just financial
returns.

1) Benefit Corporation (Public Benefit Corporation)
In April 2010, the state of Maryland became the first in the United States to enact legislation

recognizing the registration of Benefit Corporations, businesses that pursue social objectives
alongside profit-making for shareholders or owners. Legislation authorizing the establishment of
Benefit Corporations, or Public Benefit Corporations (PBCs) in some states, requires company
directors to consider public interests and stakeholder impacts, not just financial returns. This
includes evaluating how company decisions affect employees, customers, local communities, and
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the environment. This legal structure gives companies greater managerial flexibility and allows
them to balance profit generation with social and environmental responsibility. For example,
when making decisions about employee wages, office locations, or taxation, a Benefit
Corporation must consider not only financial outcomes but also how those decisions impact other

stakeholders.

While the specifics of Benefit Corporation laws vary from state to state, they share three core
elements. First, the company must declare a mission to create positive impacts on society and
the environment as part of its foundational purpose. Second, directors are legally permitted, and
in some states required, to consider the interests of a broader group of stakeholders, including
employees, suppliers, customers, and the wider community, in addition to shareholders’ financial
interests. Third, the company must regularly report on its social and environmental performance,
typically using a third-party standard that ensures completeness, credibility, and transparency.
These reports must be shared with shareholders and made publicly available, often via the

company’s website. Furthermore, some states mandate that Benefit Corporations must specify a
particular public benefit in their incorporation documents. This could include goals such as
delivering products and services to low-income populations, promoting environmental
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conservation, improving public health, or advancing knowledge, the arts, and science. However,
in the case of the state of Delaware, where a large number of companies, including Public Benefit

63 Holly Ensign-Barstow, The Rise of benefit corporations, Source: https://www.bcorporation.net/en-
us/news/blog/what-is-a-benefit-corporation/, October 3, 2024.
64 William H. Clark et al., White Paper - The Need and Rationale for The Benefit Corporation, Sustainable
Entrepreneurship Project, 2011, pp. 15 – 17, available at www.benefitcorp.org.
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