The Power of Purpose: B Corp Status for Private Limited Companies


Liam Arrowsmith, Commercial Solicitor | 13th October 2023

UK limited companies continue to prioritise ethical and sustainable business practices. Benefit Corporation, or ‘B Corp’ status has emerged as a pervasive measure of responsibility and transparency. Originally pioneered in the United States, B Corp certification has gained significant traction in the UK. This is because companies and investors find value in aligning their missions with a higher purpose.

What is B Corp Status?

B Corp is a certification offered by B Lab Inc, a non-profit organisation that assesses and recognises businesses that meet certain standards of social and environmental performance and accountability. B Corp status signifies a commitment to balancing profit with purpose – putting financial success alongside supporting people and the planet.

Since its inception in the UK in 2015, the number of companies obtaining B Corp status continues to grow. Achieving B Corp status requires certain criteria to be met during a comprehensive assessment of their impact on stakeholders. This includes employees, customers, communities, and the environment.

Advantages of B Corp Status for UK Private Companies

  • Enhanced Credibility: B Corp status is a globally recognised symbol of a company’s commitment to responsible business practices. It enhances a company’s credibility, reassuring consumers and investors of its dedication to ethical principles.
  • Attracting Purpose-Driven Talent: Becoming a B Corp can help attract like-minded employees who want to work for an organisation with a strong sense of social and environmental responsibility.
  • Competitive Advantage: B Corps often outperform their non-certified counterparts in terms of customer loyalty and stakeholder trust, providing a competitive edge in the market.
  • Positive Impact: B Corps are positioned to make a real difference in the world by aligning their business strategies with social and environmental causes. This can lead to meaningful contributions to challenges beyond turnover and growth.
  • Legal Protection: In the UK, companies can register as a “Benefit Corporation” or “Community Interest Company” (CIC). While these are distinct from B Corp certification, they share similar values and obligations, and registering under such legal structures can reinforce a company’s commitment to its social mission.

Further considerations

The following points should also be considered before an application for B Corp Status:

  • Stringent Certification Process: The certification process is thorough and can be time-consuming, with ‘full disclosure’ of business practices required. Companies must be willing to invest time and resources to meet the necessary requirements.
  • Financial Costs: Whilst initial costs of the assessment for B Corp status are low, annual certifications and maintaining B Corp status can be a burden for smaller companies – with fees ranging from £1,000-50,000, making it potentially unfeasible for some.
  • Public Scrutiny: B Corps face higher expectations in terms of transparency and accountability. Any deviation from their stated mission could lead to reputational damage.

Legal requirements for becoming a B Corp

The following steps are required for becoming B Corp certified:

  • Assessment: The first step involves completing the B Impact Assessment, a comprehensive questionnaire that evaluates a company’s social and environmental performance.
  • Legal Structure: Companies must amend their articles of association to include a commitment to considering the impact of their decisions on a broader set of stakeholders, rather than solely focusing on shareholders.
  • Verification: B Lab reviews the assessment and legal changes to ensure the company meets the certification requirements.
  • Certification: Once the company meets the necessary criteria and is certified by B Lab, it can legally call itself a B Corp.

While the journey to becoming a B Corp presents challenges, the advantages prove significant. Consumers increasingly demand ethical and responsible business practices. B Corp certification provides a clear pathway to stand out in a competitive market.

If you are a business owner considering B Corp Status then please get in touch with the Bright Corporate Team. We are experienced in guiding organisations through B Corp applications and advising on the legal requirements.