If you’ve looked around our site or seen us around somewhere, you may have seen our company’s full legal name, Joint Homes, PBC.
You’re probably used to seeing companies with Inc. or LLC behind their name, but what does the PBC mean?
PBC is short for Public Benefit Corporation. When you see PBC behind a company name, it’s referring to type of legal entity the company is.
A PBC is a new type of corporate entity that is formed with a mission to affect a positive impact on society.
What it is, legally speaking
A PBC is a for-profit corporate entity, like a C-Corp, S-Corp, or LLC. For each of these types of corporations, the owners and board members have a legal obligation to maximize shareholder value (make the most money possible for the owners and stockholders).
A PBC is different. By legally forming as a PBC and complying with the additional requirements, a benefit corporation can put the interests of additional stakeholders, like customers, partners, or society, ahead of pure profits, even as they work to grow a strong and profitable business.
The great news is that by pursuing and prioritizing a strong mission many businesses actually do better than those that do not. It’s not about sacrificing or giving away profit, it’s about finding the right balance to create a positive impact and a strong company. It’s a new way of thinking about business and the responsibility we have to the communities we serve.
The primary additional requirement a PBC must comply with is that it is intended to produce a public benefit or public benefits and to operate in a responsible and sustainable manner. They are also designed to be more transparent, with an obligation to report biennially to stockholders on its efforts to promote and advance its public benefit mission.
We intend to build our report with robust input from all our stakeholders, including our leadership, team, partners, members, and extended community, and to release it publicly. Check out our impact framework to learn more about how our approach to accomplishing our purpose.
What a PBC is not
A PBC is not a not-for-profit organization. While they are both working to produce a public benefit, to do good, a not-for-profit relies upon fundraising and, even if they sell goods or services to support the organization, they are not in the business of making profits.
Not-for-profits and PBCs are very different entities and often have different approaches to accomplishing a social impact mission, even if it's the same mission. We formed Joint as a PBC because we believe it is the best way to accomplish our purpose.
Benefit Corporations vs. B-Corps
You may have heard of a B-Corp, or seen the Certified B Corporation logo associated with other companies. They are not the same, but they are related.
There is a great organization called B Corps, a not-for-profit that is working to advance the standards and adoption of impact missions in the business world. As they put it, “Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.”
You can legally incorporate as a PBC without becoming a Certified B Corp. You can become a Certified B Corp without being legally incorporated as a PBC. You can work as a business to do good without doing either. And you can do both.
Joint is legally formed as a PBC, and we are in the process of applying to become a Certified B Corporation.
The Joint approach to social innovation
We are strong believers in the merits and potential of social innovation and social entrepreneurship as a means to affect lasting, positive social change. The defining factors we see in social entrepreneurship is that it creates solutions that are:
The advantage to creating a for-profit social enterprise is that if you succeed in creating something innovative, that creates a public benefit while also being profitable, the enterprise can sustain itself and it can grow.
Building a strong company to deliver an innovative social benefit enables you to sustain and grow so that you can accomplish more good and create a lasting change that doesn’t rely on constant fundraising and volunteer efforts. This is the goal of Joint Homes, and why we are proud to have PBC behind our name.