In Short
- B Corp certification is for businesses that commit to high standards of social, environmental, and ethical performance.
- Requirements include operating for 12+ months, completing a B Impact Assessment, and meeting legal obligations in governance.
- Certification boosts reputation but offers no tax benefits or legal status in Australia.
Tips for Businesses
Consider B Corp certification if you aim to align profits with social and environmental impact. Evaluate eligibility and legal commitments early. Engage leadership in the B Impact Assessment and prepare supporting documentation for a smoother application process.
Table of Contents
- What is a B Corp?
- Eligibility Requirements for a B Corp in Australia
- Do I Need to Be a Not-for-Profit to Be a B Corp?
- Who Operates as a B Corp in Australia?
- How Do You Register as a B Corp?
- What are the Fees to Register as a B Corp?
- What are the Benefits of a B Corp?
- What are the Disadvantages of a B Corp?
- Key Takeaways
- Frequently Asked Questions
When running a business, you may be committed to achieving exceptional levels of social and environmental performance, accountability, and transparency. If so, getting B Corp certified may be of interest to you. This article explains the eligibility requirements for a B Corp and how to register as one.
What is a B Corp?
A B Corporation, or B Corp for short, is any entity committed to meeting rigorous standards of social and environmental performance, accountability, and transparency. B Corps are certified by B Lab, a global non-profit organisation that assesses a company’s impact on its workers, customers, suppliers, community, and the environment.
B Corporations must comprehensively assess their business practices, including their:
- governance structure;
- environmental impact; and
- social responsibility initiatives.
Companies that meet the standards set by B Lab can receive certification and can use the B Corp logo on their products and marketing materials.
Eligibility Requirements for a B Corp in Australia
Most Australian legal structures, including sole traders, partnerships, trusts and companies, can apply and qualify for B Corp status. However, certain eligibility requirements apply, including that the business must:
- be operating for a minimum of 12 months;
- undertake a B Impact Assessment;
- commit to the legal requirements of B Corp certification and stakeholder governance within their governing documents (such as a constitution, trust deed or governing contracts); and
- not hold Deductible Gift Recipient status.
Do I Need to Be a Not-for-Profit to Be a B Corp?
Although you can register social enterprises, not-for-profits and charities as a B Corp, it is not a requirement. B Corps can prioritise profit and deliver returns to shareholders as well.
B Corp certification aims to create positive social and environmental impacts while ensuring the business’s financial success.
Unlike registering as a charity or being recognised as a public benevolent institute with the ACNC, being a B Corp does not provide any specific legal or government status in Australia. Consequently, B Corps currently do not receive any tax exemptions or other concessions from the government.
Who Operates as a B Corp in Australia?
There are over 500 certified B Corporations in Australia across various industries, including food and beverage, energy, financial services, and technology.
How Do You Register as a B Corp?
To register as a B Corp in Australia, you must complete the following steps:
- Meet the eligibility requirements. You must be a registered Australian business and demonstrate a commitment to social and environmental responsibility. You must also undergo a rigorous assessment process.
- Complete the B Impact Assessment or BIA. The BIA is a comprehensive evaluation of a company’s social and environmental impact covering various topics, including governance, workers, community, environment, and customers. Your leadership team should complete the online assessment.
- Verify the assessment. Once the assessment is complete, provide supporting documentation, including financial statements, policies, and other relevant information and pay the applicable fee. An independent analyst from B Lab then reviews the assessment and supporting documentation.
- Meet the legal requirements. Legal requirements involve adopting a constitution that includes social and environmental objectives and considering stakeholders in decision-making. You should undertake the following two primary inclusions or changes to your business’s governing documents:
- a purpose statement: to include an overall positive impact on society and the environment; and
- the stakeholder clause: which includes a number of positive obligations to the business’ stakeholders.
- Sign the B Corp Declaration of Interdependence. You must also sign the B Corp Declaration of Interdependence as part of the certification process. This statement of values and principles guides B Corps and reflects their commitment to using business as a force for good.
- Pay the certification fee. You must pay submission, verification and annual certification fees based on revenue.
Overall, the process of registering as a B Corp is designed to be rigorous and comprehensive, ensuring that certified companies are truly committed to using business as a force for good.
What are the Fees to Register as a B Corp?
There are three types of fees for certifying your business as a B Corp:
- submission fees: paid as a one-time payment for submitting your assessment;
- verification fees: a non-refundable, one-time verification fee that covers the cost of analysis, evidence gathering and correspondence for the initial certification; and
- annual fees: paid annually to maintain B Corp certification.
| Revenue ($ million) | Submission Fees (one-off fee) | Verification Fees (one-off fee) | Annual Fees (paid yearly) |
| $0 – $1.99 | $250 | $1,500 | $2,500 |
| $2 – $2.99 | $250 | $1,950 | $3,250 |
| $3 – $4.99 | $250 | $2,150 | $3,500 |
| $5 – $7.49 | $500 | $2,400 | $4,000 |
| $7.5 – $9.99 | $500 | $3,150 | $5,250 |
| $10 – $14.99 l | $500 | $4,140 | $6,900 |
| $20 – $29.99 | $500 | $7,500 | $13,800 |
| $30 – $49.99 | $500 | $7,500 | $18,400 |
| $50 – $74.99 | $700 | $10,500 | $23,000 |
| $75 – $99.99 | $700 | $10,500 | $29,325 |
| $100 – $174.99 | $900 | $14,500 | $34,500 |
| $175 – $249.99 | $900 | $14,500 | $40,250 |
| $250 – $499.99 | $900 | $14,500 | $46,000 |
| $500 – $749.99 | $900 | $14,500 | $51,750 |
| $750 – $999.99 | $900 | $14,500 | $57,500 |
| $1 bil – $1.5 bil | $900 | $14,500 | $82,800 |
What is Equity pricing?
Equity pricing is a 40% reduction in annual B Corp Certification fees. From 1 July 2023, B Lab has introduced equity pricing for B Corp Certification fees for First Nations and Māori-owned businesses. In doing so, B Corp aims to reduce the financial barriers to participation to support First Nations and Māori-owned businesses seeking to benefit from B Corp Certification.
What are the Benefits of a B Corp?
The following table outlines some of the benefits of B Corp certification.
| Benefit | Explanation |
| Access to a global community | You can be part of a global community of like-minded businesses that can provide valuable networking opportunities and access to resources and best practices. |
| Improved brand reputation | B Corp certification is a recognised symbol of a company’s social and environmental responsibility commitment. Certification can build trust with customers and other stakeholders and enhance the company’s brand reputation. |
| Increased employee engagement | B Corps must be committed to positively impacting their workers and are often recognised for their employee-friendly policies and practices. This will assist in attracting and retaining top talent and increase employee engagement and satisfaction. |
| Competitive advantage | B Corps are known as industry leaders for their sustainability and social responsibility commitment. This can provide a competitive advantage to help differentiate from your competitors. |
| Greater access to funding | Investors and lenders are increasingly looking for companies committed to social and environmental responsibility. Being a certified B Corp can help companies to attract investment and secure financing. |
What are the Disadvantages of a B Corp?
Although there are several benefits of being a registered B Corp, there are also a number of disadvantages:
- the process of becoming a B Corp is time-consuming and expensive and may take over a year to achieve;
- B Corps have less flexibility in making strategic decisions as they must balance their social and environmental objectives; and
- annual certification requires continuous compliance and payment of certification renewal fees.
The LegalVision Startup Manual provides guidance on a number of common challenges faced by startup founders including structuring, raising capital, building a team, dealing with customers and suppliers, and protecting intellectual property.
The guide includes 10 case studies featuring Australia’s top VC fund partners and leading Australian startups.
Key Takeaways
Being a B Corp can provide many benefits to companies committed to using business as a force for good. Becoming a B Corporation is a long-term commitment involving collaboration and cooperation within your business. B Corps require consistent work and commitment to B Lab’s certification standards to foster a sustainable economy and hold other B Corps accountable. However, the benefits can help to drive long-term success and create positive social and environmental impact.
To become a Certified B Corp, you must:
- meet eligibility requirements;
- complete the B Impact assessment;
- apply for certification; and
- pay the necessary fees.
Before applying for B Corp Certification, ensure you have conducted a complete business and legal audit. This looks at the structure of your business, legal relationships, employees, contracts, and brand. For more information about becoming B Corp certified, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A B Corporation, or B Corp for short, is any entity committed to meeting rigorous standards of social and environmental performance, accountability, and transparency.
No, B Corp certification is open to for-profit businesses. While not-for-profits and social enterprises can also become B Corps, certification focuses on creating positive social and environmental impacts alongside financial returns.
We appreciate your feedback – your submission has been successfully received.
