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What Is a Public Benefit Corporation?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 03 July 2014
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    Conjecture Corporation
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A public benefit corporation is a type of nonprofit organization that is created and authorized to operate as a means of provide some type of ongoing benefit to the communities in which the operation is established. In many nations, the charter for this type of operation is provided through a state or provincial government, and must meet specific criteria for organization that is established by those jurisdictions. In some areas of the world, a public benefit corporation is classed or identified as a non-profit community service corporation.

The range of operations that may qualify as a public benefit corporation vary from one jurisdiction to another, although all models will provide some sort of ongoing benefit to the general public. Charities of different types are often chartered using this particular type of corporation model, since they do provide some level of assistance or help to individuals who are in need. Other organizations like adult day care centers may also meet the criteria for this type of designation in many jurisdictions. The final determination of whether or not an operation qualifies as a public benefit corporation will depend on the findings of whatever regulatory agency is charged with the responsibility of reviewing an approving this status to organizations operating within the jurisdiction.

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In many situations, a public benefit corporation is structured to include a board of directors who are charged with the responsibility of making sure the organization remains focused on its stated reasons for existence. The idea is to make sure that there is some type of body within the organization that works to keep the operation within compliance with the charter issued by the state or province, and that it does in fact continue to provide value or benefit to the general public.

While it is common in many nations for a public benefit corporation to receive a charter from a state or provincial regulatory agency, there are situations in which that charter may be granted by a national or federal government. Governments may also choose to create this type of corporation by a government statute. In nations that include the existence of a monarchy in the overall government structure, charters to qualified organizations may be granted by a member of that monarchy. In any situation, the organization seeking recognition as a public benefit corporation must be able to identify what type of benefit it offers and how it will go about offering that benefit to the public.

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