Friday, March 21, 2014
Statutory provisions allowing for the formation of Delaware Public Benefit Corporations ("PBCs") went effective August 1, 2013. According to the latest data I have, 87 PBCs have been formed in Delaware .
While 87 is an extremely small number when compared to the more than 1 million entities formed in Delaware, Delaware has already bested all states that have passed a benefit corporation statute, except for California. California, which has a 20 month head-start on Delaware, has 139 benefit corporations.
Some states, like New Jersey and South Carolina have been stuck at fewer than 5 benefit corporations for well over a year.
The group of researchers I am working with now estimates that there are about 350 benefit corporations in the U.S. (including PBCs), though the data is relatively difficult to obtain from the secretary of state's offices and obtaining reliable, complete data is even more difficult.
Currently, there are no significant tax benefits (at the state or federal level) for social enterprises (like PBCs and benefit corporations) in the U.S., but the U.K. recently announced 30% tax relief for their social enterprises. (The U.K. social enterprises are a good bit different than those in the U.S.).
It will be interesting to see if the benefit corporation form increases in popularity or languishes.
Obviously, if tax breaks were given to benefit corporations in the U.S., popularity would likely rise. That said, tax breaks would also likely lead to misuse of the form and the need for additional oversight. (Additional oversight is already in place in the U.K.)