If a client wants to sell a B-Corporation, can they do so or must they reorganize as a C-Corporation?

July 10, 2014

There is a dynamic discourse that exists between Lawline faculty and their viewers that goes far beyond the live viewing of a program.  Lawline faculty and subscribers benefit from a discussion forum where they can discuss substantive legal topics relevant to the program.

Every week, Sigalle Barness shares some of the top answers faculty have supplied to subscriber questions.  These questions are from real Lawline subscribers viewing Lawline on-demand courses.

"Counseling the Socially Conscious Entrepreneur"

Question: "If a client forms a B-Corporation and it becomes so widely successful that they want to sell it, can it be acquired in its present form? If not, can they reorganize as a C-Corporation? I read that after Ben and Jerry's was bought by Unilever, it was subsequently converted to a B-Corporation subsidiary of Unilever, but that was after it had been acquired as a regular corporation."

Answer by Todd KulkinShares in a benefit corporation can be bought and sold just like shares in any other corporation. Remember that the stock certificates of a benefit corporation must be marked as such.

In the case of Ben & Jerry’s what probably happened was that Unilever bought the shares and kept the company as separate benefit corporation without converting the parent company. A benefit corporation may elect to file as a C-Corp or an S-Corp for tax purposes (there is no difference between the two with respect to liability).

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This was taken from the Lawline Immigration Law CLE Program entitled "Counseling the Socially Conscious Entrepreneur" presented by Lawline Faculty member Todd Kulkin.

 

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Author Bio

Written by Sigalle Barness

Sigalle Barness is the Vice President of Content and a member of Lawline.com’s Executive Team. Sigalle provides business strategy and leadership to the company and directly manages Lawline’s accreditation, programming and production operations. Sigalle also analyzes market trends and applies insights to develop and execute written and video content including online educational programming, email marketing, social media campaigns, press releases, blog articles and large scale live events. Sigalle graduated summa cum laude from Rutgers University and holds a B.A. in English. She received her J.D. in 2010 from Benjamin N. Cardozo School of Law in New York, NY. Sigalle is admitted to practice in both New York and New Jersey. She is also an active member of the Association for Continuing Legal Education (ACLEA), and is the former Chair of ACLEA’s Programming Special Interest Group (2013 – 2015) and National Provider Special Interest Group (2015 - 2017). Before joining Lawline in March 2012, Sigalle litigated civil claims in areas such as landlord tenant, breach of contract and tax lien and mortgage foreclosures actions. She also handled transactional matters such as drafting residential and commercial leases, demand letters, and client conflict waivers. Sigalle is an avid lover of music, video games, blogging, asking questions and all things food. She is also fluent in Hebrew and enjoys writing fiction, traveling and scuba diving.

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