To B or not to B.....Corp

[Jon Coleman]

I am interested in potentially starting a benefit corporation but am unsure if it really makes sense to incorporate that way in this industry.  I found a thread from about 8 years ago on the forums discussing benefit corporations in real estate investing, including a lot of valuable insight, but I didn't find any recent conversations.  The overall impression I got from others was that it would be better to either establish a non-profit or to go the traditional route and pair it with charitable donations on the side.  

One of the reasons why I suspect filing as a benefit corporation may not be as good of a fit is due to the size of the company.  My intention would be to initially be the only employee, and I see that many of the B Impact Assessment questions are geared towards employees who aren't also the owner.  It also seems like filing as a benefit corporation may make more sense for large organizations, particularly those where the CEO would need to put greater emphasis on looking out for employees and the community instead of being primarily driven by stock prices/performance.  On the plus side, it appears that you can elect to convert from one type of corporation to a benefit corporation at a later date and don't have to be one from the start.

Another argument made against filing as a benefit corporation is the additional oversight and requirements.  An annual report is required (varies by state) and that an organization has more limitations placed on it as a benefit corporation.  Additionally, there can be significant cost and effort involved with getting B Corp Certification by B Lab annually if you choose to also pursue that.

I'd like to make it make sense to file as a benefit corporation but it seems like the arguments against are stronger.  Some of the reasons I'm drawn to the benefit corporation option are to strike more of a balance between the needs of shareholders, clients and the community.  I recognize that this approach can still be taken with a more traditional corporate structure, particularly when it is a very small company, but I also appreciate the accountability.  As for the nature of the business, it would be primarily focused on rentals in lower-income areas.

I recognize that a benefit corporation is likely too impractical in this scenario but I would still greatly appreciate input.  What are your thoughts on benefit corporations for real estate investment?   For your own business, how have you elected to approach giving back to the clients/tenants and community?