The B Corp
legal requirement

The legal requirement is a commitment to consider the impact of decisions on all stakeholders — employees, customers, suppliers, the community, and the environment.

The importance of stakeholder governance

Stakeholder governance is a fundamental part of being a B Corp. It’s a commitment to operating a business with more than profit in mind. It means decisions are made not only to deliver returns for shareholders, but also to create positive outcomes for people, communities, and the planet. 

 

We have been exploring ways to embed stakeholder governance in businesses in Australia and Aotearoa New Zealand since 2012, and are excited to announce the next step for our region. To learn more about the history of the new legal requirement, read about the evolution of benefit company reform in Australia. 

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How to meet the legal requirement

Adopting the B Corp legal requirement is committing to a higher standard of accountability in your company’s decisions, even through leadership changes or capital raises. It signals to investors, employees, and directors that your mission is embedded into the core of your business. 

 

To meet the requirement in Australia, businesses must update their constitution to include two clauses: the purpose statement and the stakeholder clause.

The purpose statement


The purpose of the Company is to deliver returns to shareholders whilst having an overall positive impact on society and the environment.




The stakeholder clause


  1. In discharging their duties under this constitution, the Corporations Act and the general law, the directors or other officers of the Company: a. will include in their consideration the following factors

    i. the likely consequences of any decision or act of the company in the long term; and
    ii. the interests of the company’s employees; and
    iii. the need to foster the company’s business relationships with suppliers, customers and others; and
    iv. the impact of the company’s operations on the community and the environment; and
    v. the desirability of the company maintaining a reputation for high standards ofbusiness conduct; and
    vi. the interests of the members of the company; and
    vii. the ability of the company to create an overall positive impact on society and the environment; and

    b. Need not give priority to a particular factor referred to in paragraph (a) over any other factor (included in paragraph (a) or otherwise).





 
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Timelines for meeting the
legal requirement

Existing B Corps


  • Australia: 31 March 2022 or your next recertification, whichever is later
  • Aotearoa New Zealand: 31 March 2023 or your next recertification, whichever is later




Aspiring B Corps - Australia


  • Companies with 0-49 workers: before finalising your certification
  • 50+ workers: within 12 months of certification*

    *​​​​​Most companies can secure an additional 7.5 points under the Mission Lock IBM section of the BIA if you complete the legal requirement prior to certification. If you have already submitted your assessment, you may still be able to complete the legal requirement step and secure these points. Get in touch with us for assistance: certification@bcorporation.com.au




Aspiring B Corps - Aotearoa New Zealand


  • Companies with 0-49 workers: before finalising your certification*
  • Companies with 50+ workers: within 12 months after your certification**

    *All companies who submitted their assessment for verification prior to 1 January 2022 have the option of completing the legal requirement within 12 months after your certification.

    **Most companies can secure an additional 7.5 points under the Mission Lock IBM section of the BIA if you complete the legal requirement prior to certification. If you have already submitted your assessment, you may still be able to complete the legal requirement step and secure these points. Get in touch with us for assistance: certification@bcorporation.com.au





Thank you to MinterEllison and MinterEllisonRuddWatts for providing expert guidance and support in developing the new legal requirement in Australia and Aotearoa New Zealand.

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Resources to meet the legal requirement

Our legal partners have compiled resources to make meeting the legal requirement as smooth as possible.

 

B Lab Australia & New Zealand recommends seeking legal advice before making changes to your constitution.

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The Full 
How-To Guide

 

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Guide for
Directors (AU)

 

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Guide for
Directors (NZ)

 

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Bringing the legal requirement to life

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Where to get advice

If you need help with the changes, these B Corp law firms can help answer any questions or discuss tailored assistance.

Marque
Lawyers (AU)

Rankin Business Lawyers (AU)

MinterEllison
RuddWatts (NZ)

 

FAQs about the legal requirement

Explore these answers to our frequently asked questions.

The purpose statement


The purpose of the Company is to deliver returns to shareholders whilst having an overall positive impact on society and the environment.




The stakeholder clause


  1. In discharging their duties under this constitution, the Corporations Act and the general law, the directors or other officers of the Company: a. will include in their consideration the following factors

    i. the likely consequences of any decision or act of the company in the long term; and
    ii. the interests of the company’s employees; and
    iii. the need to foster the company’s business relationships with suppliers, customers and others; and
    iv. the impact of the company’s operations on the community and the environment; and
    v. the desirability of the company maintaining a reputation for high standards ofbusiness conduct; and
    vi. the interests of the members of the company; and
    vii. the ability of the company to create an overall positive impact on society and the environment; and

    b. Need not give priority to a particular factor referred to in paragraph (a) over any other factor (included in paragraph (a) or otherwise).





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