Business owners typically incorporate because their lawyer or accountant told them to. There is a relatively new reason to consider as well. You may want your business to become a "benefit corporation" so that it not only receives tax benefits and legal protections, but also to hold your business to a higher standard. New York State started letting businesses register as benefit corporations in 2012 so that they can focus on their triple bottom lines of profit, people, and planet.
So what is a benefit corporation? Essentially, it is a for-profit business that is also obligated to further certain public benefits. One of the purposes of a NY benefit corporation must be to create general public benefit. General public benefit means a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation.
NY benefit corporations may also elect to have specific public benefits. Some examples of these are (1) providing low-income or underserved individuals or communities with beneficial products or services, (2) promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business, (3) preserving the environment, and (4) improving human health. NY benefit corporations are also required to take into consideration numerous stakeholders, including shareholders, employees, and customers.
Does your business have a social mission? Are you thinking about more than just profits? If so, you may want to consider forming a benefit corporation. We have created a NY Benefit Corporation Formation Checklist you can use to help you get started. If you have any questions along the way, please ask. We can help.