Delaware is considered one of the most important states for those seeking venture capital, private equity, and public capital markets. Incorporating here has its advantages, but can seem like a daunting task. This checklist helps to streamline the process and guides you through the five most important aspects of incorporating as a benefit corporation in Delaware.

1. Filing with Delaware
   • File a certificate of incorporation with the Delaware Secretary of State that meets statutory requirements
     
     • This is similar to what other corporations file, with some special requirements pertaining to corporate purpose and name (see step two below)
     • Pay the required fee
     • A registered agent is also required and can help you comply with the state incorporation procedures
2. Special Requirements
   
   • In the certificate of incorporation, identify one or more specific public benefits that the company will promote . For more information on picking a public benefit in Delaware, please see here.
   • Within the heading of the certificate of incorporation, state that the company is a public benefit corporation
   • Previously, the words “Public Benefit Corporation” or “PBC” were required in the company name. As of August 2015 this is no longer a requirement. Using either of these identifiers could result in issues qualifying with your name in other jurisdictions that don’t follow such naming conventions.
3. For Existing Delaware Corporations
   
   • File a certificate of amendment with the Delaware Secretary of State
   • As mentioned in step two, amend the certificate of incorporation to include one or more specific public benefits the company will promote
   • Obtain at least 66% shareholder approval for the transition to public benefit corporation status (prior to August 2015, 90% approval was needed)
4. Director Duties
   
   • Directors should be clear that, when making decisions in their new role with a Delaware public benefit corporation, they are required to balance the shareholders’ interests, the public benefit, and the interests of those affected by the company’s actions (like employees, for instance)
   • Note: unlike other states, Delaware does not require a Benefit Director
5. Benefit Report
   
   • Provide stockholders with a benefit report at least once every other year (in many other states the report is required yearly)
   • The report should include:
     
     • The objective that the board of directors established to promote the public benefit
     • The standards adopted to measure progress in promoting this public benefit
     • Objective facts to determine the success in meeting these standards, and an assessment of that success
   • Unlike other states that require the report be made public, Delaware public benefit corporations have the choice to make it public or not

Speak to a CT Service Rep to get started incorporating as a Delaware Public Benefit Corporation.

Certified B-Corps

Although not required, many public benefit corporations are reinforcing the commitment to their cause by becoming a Certified “B-Corp” through the nonprofit B-Lab. Certification proves to others – like stockholders, customers and employees – that your organization meets rigorous social and environmental performance, accountability and transparency standards. Once certified, you can use the B Lab logo, which signals to the market that you are a responsible company upholding your stated mission.

More helpful tips

By-laws

• Your bylaws are the rules and regulations for operating the public benefit corporation, and will need to be drafted (or revised, for existing corporations) to reflect the new corporate form
• Include aspects like how many directors you will have, when and where meetings for stockholders will take place, and the rules for operation

Organizational Meeting

• An organizational meeting must be held after filing the certificate of incorporation
• The typical purpose of this meeting is to elect directors and adopt the by-laws

Stock

• The stock certificate (or stock notice) must clearly indicate that the company is a public benefit corporation

Company Name

• You may want to create new collateral like an updated logo, business cards, website, and more
• When picking a company name, it’s recommended you do a trademark check to ensure you have the legal right to that name before using it
• Once the trademark check is complete, file an application to reserve your new company name to make sure no other company takes it before you can file your certificate of incorporation

LEARN MORE

Learn how CT can guide you through the ins and outs of forming a Benefit Corporation. Contact a CT representative at 844-234-4745 (toll-free U.S.) or visit ctcorporation.com.

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