With the recent passing of the HB186 Benefit LLC initiative, the official launch of the legislation happened Wednesday morning May 9th on Utah Capital Hill.
The Benefit LLC initiative shows the public that your company is very purpose driven.
Corporate social responsibility is becoming critical to all organizations and companies as the rise of environmental and social issue become progressively important to the generation of consumers. PilmerPR is the 2nd company in Utah to be designated as a Benefit LLC.
In this new Millennial era, many entrepreneurs are scrambling to find a way to integrate social causes and corporate responsibility into their purpose-driven business plan. Millennials, typically defined as those born between 1981 and 1996, have shown a remarkable intolerance for companies who don’t associate themselves with the causes that are increasingly important to this rising generation.
Utah, among four other U.S. states, has introduced a new designation called a “Benefit LLC” (BLLC). This allows a business to consider factors beyond profit when making decisions and providing legal protection against stakeholders. With this designation, there are no tax consequences, instead, it is a message to the public that a company is taking its corporate social responsibility seriously. It also lets potential stakeholders know that contributions to the broader community can provide additional value.
So, why is this important to you? Any entrepreneur setting up a new business should carefully consider all of the advantages and consequences of every available business structure. If your company has a desire to do good as well as be great at what you do, consider the following paybacks of the Benefit designation.
1. Building community trust. Becoming a Benefit LLC gives your company the opportunity to be transparent about your goals, which improves relationships with all of your stakeholders. It bridges the relationship between the organization and the consumer with the ability to showcase how you give back to the community. This matters to Millennials, and other audiences around the globe, who use this information to make purchasing decisions.
2. Economic impact. Benefit Corporations and LLCs are rapidly emerging as economic leaders— Patagonia, Method[TB1] and Etsy. As your voice within the industry grows, your exposure will begin to pour outside of the industry sparking conversation with all audiences. Putting forth new ideas is a sure-fire way to generate buzz and growth for your business. As the new ideas are proven, other companies will adopt them, creating more profit, jobs and goodwill for everyone.
3. Marketing advantages. While becoming a Benefit LLC is so much more than a marketing tactic; it does have the potential to improve market visibility. Attaching this moniker to your business draws attention to the good that your company is already doing, which can gain media exposure and other third party validation for your business. Gathering this type of positive press not only brings attention to your brand, it can ultimately build goodwill to protect you from the occasional, but inevitable, negative attention. With the BLLC after your company name, there will be expectation from investors who are looking for a sound place to put their capital.
4. Focus. Many new and established companies face similar challenges in the way they structure their mission and goals. While the bottom line should prevail in business, the secondary goals of your company make a huge difference in the way that you operate, hire employees and ultimately go after profit. Establishing yourself as a Benefit LLC can help give your company focus on the issues that matter to you most. It will also help with the public to earn a profit and make a difference in the world you are apart of, which in the end, will come back as profit.
While the BLLC may not be the right fit for every startup, it’s definitely worth considering. Odds are, your brand is already striving to bring new innovation to the table. Larry Fink from Blackrock, recently released a letter to all CEO’s reminding them that finding a purpose in this world for your company to connect to, is one of the most important decisions you can make.
Establishing what you are passionate about and intersecting with a need in the world will give you that purpose. Your audiences will take you seriously with the BLLC and want to contribute to the causes you back by being an active consumer of your product or service. Imagine the impact on the world if companies began to take an active role in giving back to society?
Pilmer PR can help you learn more about the importance of a BLLC and corporate responsibility. Visit us as pilmerpr.com to find out how.Share