New Leaf Paper and Plum Organics were among the 17 companies on Thursday that were the first to register as Delaware benefit corporations after the legislation legalizing it was signed on July 17.
Some of the other registering companies included leading fair trade food business Alter Eco, popular home goods brand Method Products and online personal delivery farmers' market Farmigo.
These companies are backed by venture capital investors, corporate investors and parent companies, including San Francisco Equity Partners and European eco-leader Ecover (Method), Campbell Soup Company (Plum), Benchmark Capital and RSF Social Finance (Farmigo), Pacific Community Investors (New Leaf Paper) and Good Capital (Alter Eco).
“Benefit corporations meet a market need and a societal need,” said Governor Jack Markell. “They have the potential to create high-quality jobs and improve the quality of life in our communities.”
Delaware is the 19th state (plus the District of Columbia) to enact benefit corporation legislation, but as legal home of most venture-backed businesses, the majority of publicly traded companies and nearly two-thirds of the Fortune 500, it is the most important state for businesses that seek access to venture capital, private equity and public capital markets.
Current Delaware law requires corporations to prioritize the financial interests of shareholders over the interests of workers, communities and the environment. Benefit corporations enjoy legal protection to create value for society, not just for shareholders, while meeting higher standards of accountability and transparency.
“Adopting this legislation is a natural extension of how we do business at Plum,” said Neil Grimmer co-founder & president of Plum Organics. “We are committed to providing little ones with the very best food from the very first bite, and a publicly stated benefit recommits us to that core value. We are honored to be among the first to reincorporate as a benefit corporation, and hope today will set the stage for many like-minded companies to join us.”
In recognition of what members of the Delaware Bar have called a “seismic shift in corporate law,” more than 600 business leaders from the community of certified B Corporations have signed an Open Letter inviting their colleagues to join them in redefining success in business. Signatories include well-known businesses such as Patagonia and Ben & Jerry’s and high-growth businesses such as online marketplace Etsy and eyewear company Warby Parker.
Four other companies — SustainAbility, Honest Company, GOOD Inc. and Performance Management Institute — have also committed to registering as benefit corporations in the coming year.
"With the passage of Delaware Benefit Corporation legislation, the path is now clear to scale business as a force for good," said Andrew Kassoy, B Lab co-founder. "It's great to see venture capital and corporate investors taking advantage of this new tool to scale mission driven businesses on the very first day."