Social-minded entrepreneurs might benefit from Maryland business incorporation

Recently-passed legislation has created a new type of entity for business people interested in using their for-profit companies for social good.

State officials have created a new corporate form known as a “benefit corporation,” reports BusinessWeek. Under this new structure, entrepreneurs can add a social mission statement to their corporate charters when they undergo business formation.

Under the law, entrepreneurs who file their companies as benefit corporations will submit to auditing to ensure they have an impact on their specified social causes, and they will report contributions to that cause on a regular basis. The status also allows them to consider a range of outside stakeholders in business decisions, reports the source.

Nonprofit organization B-Lab proposed the model that benefit corporations are based on. B-Lab cofounder Jay Coen Gilbert told BusinessWeek he thinks social ventures are “becoming increasingly not only acceptable but sought after by mainstream investors.” He hopes the new legal designation will make it possible for new philanthropic companies to find startup capital from investors.

If this new corporate entity is not enough to make entrepreneurs consider business incorporation in Maryland, business people may be interested to learn that the state is becoming increasingly business-friendly. According to TaxFoundation.org, new tax legislation may soon give the state competitive rates.