Fastest Growing & Innovative Companies
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By passing legislation that allows for the creation of so-called “benefit corporations,” as well as what are known as L3C, or low-profit limited liability corporations, the General Assembly, and Gov. Lincoln D. Chafee, who signed the bill into law, have made a small improvement in the state’s business climate.
In short, benefit corporations and L3Cs give for-profit entities the ability to function more like a nonprofit, in that they can take a social mission into account when generating value for shareholders, as well as in some cases, accept charitable donations much as a nonprofit can do.
Why does this make Rhode Island a better place to do business? First, it puts the Ocean State smack in the middle of a growing national trend. Sixteen other states and the District of Columbia have passed similar legislation, a recognition that many of today’s entrepreneurs have more than profit in mind when they start their venturing odysseys.
In fact, social venturing is one of the fastest-growing sectors of the economy, and it would have been a shame to let those enterprises pass Rhode Island by. Now we don’t have to worry about that. •