Business StructuresCorporations
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A corporation is a popular choice for small business owners of many varieties—farmers markets and farms included. The corporation structure protects an owner’s personal assets from business liabilities, a benefit that sole proprietorships and partnerships can’t provide. The corporation offers the same liability protection for owners’ personal assets as does an limited liability company (LLC). The corporation is often seen as less flexible, requiring more formalities than the LLC. To some extent, that impression is true; however, looking closer, many farmers market owners aren’t always swayed by the LLC’s flexibility and relative informality. In many states, forming a corporation can be less expensive than forming an LLC, and local service providers may be more familiar with corporations. These factors continue to motivate some farmers market owners to form corporations.

Corporations are created by filing paperwork with the state, generally the same state in which the farmers market is located. A corporation can have one or multiple owners, who are often called “shareholders.” The corporation is a for-profit business structure and, as such, taxes are owed on any profits generated. Owners of small corporations have a choice in how they want their business to be taxed by the Internal Revenue Service (IRS), a subject this section will explore in detail. By and large, farmers markets organized as a corporation will chose to be taxed under the “S” section of the code, which stands for “small business.” Many people thus refer to these business structures as “S Corporations.”

However, farmers markets that have a charitable or educational mission and also want to make a profit for the benefit of the owners may want to consider forming a “benefit corporation.” The benefit corporation expressly allows owners of a company to establish a social or environmental purpose in addition to making profits. This is also known as the triple bottom line: people, planet, profits. The benefit corporation is not a nonprofit corporation or even a hybrid for-profit/nonprofit; it is a for-profit business entity that has a fundamental social or environmental purpose. To learn more about benefit corporations, click here.

Defining Characteristics

Key characteristics that distinguish a corporation from a sole proprietorship or partnership:

  • Formation paperwork. Although not complex, steps must be taken to form a corporation.
  • Annual maintenance. Annual paperwork, meetings, and meeting notes are required to maintain the corporation. Filing annual paperwork with the state may involve a fee.
  • Personal asset protection. A corporation with proper set-up and maintenance procedures generally offers its owners protection for their personal assets from business liabilities. Business assets are always available to satisfy business liabilities.

Key characteristics that distinguish a corporation from an LLC:

  • Less leniency regarding paperwork. Corporations are required to appoint officers and bylaws, whereas LLCs are not. However, whether required or not, both LLCs and corporations should appoint responsible persons and create governance documents (bylaws or an operating agreement) to preserve owners’ liability protection.
  • Number and type of owners allowed. Corporations filing their taxes as an S Corporation (which most small businesses will do), must have fewer than 100 shareholders; LLCs can have an unlimited number of members. S Corporation shareholders must be real persons; LLCs can have owners that are not real persons, such as trusts and other LLCs.

Key characteristics that distinguish a for-profit corporation from a nonprofit:

  • Exclusive ownership and control. As with any for-profit business structure, the owner ultimately controls all farmers market assets, although responsibility for day-to-day matters can be delegated to employees and independent contractors.
  • Exclusive rights to profits and losses. As with any for-profit business structure, the farmers market owner has exclusive rights to all profits or losses that the farmers market as a whole generates (not the profits or losses generated by individual vendors).
  • Donations not tax-deductible. As with any for-profit business structure, if the farmers market plans to receive donations from organizations or community members, donations will not be tax deductible for the donor.
  • For-profit business structure. A farmers market organized as a corporation is considered a for-profit business whether or not the market actually generates a profit. The perception of being a “business” may be beneficial in some circumstances but not in others.
  • Limitations on use of volunteers.  As with all for-profit business structures, corporations are limited in their ability to legally use volunteers and unpaid staff persons. More on that here.

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Getting Started

Creating a corporation involves a few steps. These steps can seem cumbersome for a small business, but they are quite manageable. One of the most unintuitive things about a corporation is that a single person can do it all. The corporation’s single owner can be the incorporator, the shareholder, the director, and all the officers simultaneously, thus approving and filing everything all in a single sitting. It’s awkward, but not difficult.

Creating a corporation involves the following steps. The more owners a corporation has and the more complex the corporation’s business, the more steps may be involved in properly incorporating the business. These steps are the minimum and are sufficient for many small businesses, like farmers markets.

What information is required for the articles of incorporation?

The articles of incorporation will need to list the name and contact information of the “incorporator” and the “registered agent.” An incorporator is an individual who organizes and arranges for the articles of incorporation to be filed. The incorporator must verify that all the included information is true and correct, and sign the articles of incorporation. This could be an owner. It is often the corporation’s attorney. The registered agent is basically the person that will receive “service of process,” which is an official notice that the corporation is being sued. It does not mean this individual is liable or responsible for the outcome. It simply means that the agent is required to pass on the notice to the shareholders of the corporation so that the corporation is officially on notice. Some businesses select a shareholder to be the agent. Others choose to work with one of the many independent businesses that provide agent of process services for a small fee.

The corporation’s board of directors is named in the articles of incorporation. The directors do what their name says: they direct the corporation along its path and make big decisions that impact the financial affairs of the company. This includes approving contracts and agreements, making decisions about significant purchases such as land or expensive farm equipment, and approving overarching corporate policies including employee handbooks and the like. The directors also decide when and whether to pay dividends to the shareholders. Dividends are payments made to the shareholders if and when the business makes a profit. These details are spelled out in greater detail in the section on control and decision-making.

A) Draft and file the articles of incorporation with your state

Once the initial board of directors is appointed, the next step is filing the “articles of incorporation”—the formal document that creates the corporation. This document is filed at the state level, usually through the secretary of state’s office. Many states provide a form that can be easily downloaded or even completed online. Other states simply list the information required, in which case a document that includes this information can be written. An internet search for “file a corporation and [the state’s name]” should bring up a form and more information. Each state charges different fees, which vary from $25 to $1,000. Once the articles of incorporation and fee are filed and processed, the filing agency will confirm that the corporation is now recognized as an official business entity in the state.

B) Draft and adopt the bylaws

State law requires corporations to have bylaws. Bylaws are the ground rules for governance, including how responsibility is divvied up among the shareholders, directors, and officers. State corporation laws require that officers be named. Although, again, a single person can hold all the officer positions. This is true even if there is more than one owner. State corporation statutes often set specific parameters for certain governance matters that are to be included in bylaws, such as when and how shareholders must be informed about annual meetings, items that must be voted on at annual meetings, how voting must take place, and restrictions on who can decide what, etc. These details can vary from state to state. Often, local public libraries keep sample bylaws written for corporations formed in the state. These can offer terrific guidance. It’s helpful to ask about bylaws specific for very small businesses if there’s only one or a handful of owners. In small business corporations, detailed bylaws often aren’t necessary. An attorney who is familiar with state statutes can also help ensure that the bylaws comply fully with state law.

Bylaws are not filed with the state; instead, the board of directors usually votes to adopt the bylaws. A copy of the bylaws should always be kept in the corporation’s files for reference as needed.

C) Elect officers according to the bylaws

Next, the directors should elect officers. Officer positions include a president (or chief executive officer, CEO), a treasurer (or chief financial officer, CFO), and a secretary. The president has ultimate legal responsibility for the corporation’s activities. The treasurer bears some legal responsibility for maintaining the corporation’s financial matters, including keeping the accounting processes up to date. The secretary is in charge of maintaining the corporation’s records, documents, and “minutes” from shareholder and board meetings. One person can wear all of these hats. The section on control and decision-making goes into greater detail on board and officer legal responsibilities.

Corporations owned by one person

Corporations involve many different hats, but a single person can wear them all. If the corporation is owned by one person, that person can be the incorporator—simply by choosing to form the corporation and completing the articles of incorporation. That person can also appoint herself as the corporation’s single director. Likewise, that person can also be the corporation’s registered agent.

D) Approve issuance of stock

The directors should also officially approve the issuance of shares or stock in the company. The number of shares issued to each owner will correspond to their ownership interest of the farmers market. Let’s say that the articles of incorporation specified that the corporation is authorized to issue 10 million shares. The board could decide to issue all the shares to the founding shareholders. In this case, if there are two owners of a farmers market and each owned 50% then each would get five million shares. Or, they could decide to set some shares aside, say one million, for future investors or stock option benefits for employees. In this case, the 50/50 owners would each get 4.5 million shares. There are a number of ways shares can be issued, and it often depends on the objectives of the owners. These are decisions that have financial implications for the company and should be made in consultation with a corporate attorney or a tax accountant. Actual share certificates are not legally necessary. A statement of meeting minutes approving issuance of stock is sufficient. Of course, all stock could be issued to the single shareholder.

E) Decide whether to elect S Corporation federal tax status

If the corporation will be an S Corporation (i.e., if it elects S Corporation federal tax status), the directors should approve the selection. The bylaws likely lay out the exact process for choosing the corporation’s tax structure. Good written minutes for all meetings held by the board of directors are very helpful for showing that the bylaws were followed. As discussed further in the “Liability” section, following bylaws adds to the liability protection offered by a corporation. When might a corporation wish to elect S Corporation federal tax procedures? This is discussed in the “Taxation” section.

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Corporations were created hundreds of years ago to allow individuals to create an entity separate from themselves and therefore provide some personal protection from the business’ liabilities, which sole proprietorships do not offer. Corporations were the first, and for centuries the only, option for earning personal liability protection from business liabilities. In a corporation, the owner’s personal assets are typically not available to satisfy business liabilities. If the business issued or incurs debt the business cannot pay off, only business assets are available to fulfill that liability. Limited liability companies (LLCs), incorporated nonprofits, and cooperative corporations also provide this benefit.

The corporation’s personal liability protection...

Sun Valley Farmers Market, Inc.

The liability protection offered by a corporation and an LLC are the same, for all intents and purposes, so the same example we used in the “LLC” section applies here as well. Let’s say Sun Valley Farmers Market, Inc. sets up a welcome station at the farmers market. Here, the owner manages the vendors and does paperwork while selling gift certificates and tote bags to customers. One day, a person trips and falls over the concrete blocks that stabilize the Sun Valley Farmers Market tent. The injured person sues the farmers market for the injury. Because Sun Valley Farmers Market is a corporation, the lawsuit is properly filed against the corporation itself and not against the owner. Ideally, the market would also have business insurance and would immediately notify the insurance company to take over the lawsuit and pay on any settlement.

But, let’s say the market either does not have insurance or the liability exceeds the policy limits. In this case, the injured person might seek the farmers market’s assets. The injured person could lay claim to everything the farmers market owns as compensation for the injury. However, the injured person could not claim things that the owner possesses—such as the owner’s house, retirement funds, vehicle, or other assets. The fact that the owner’s personal assets are not available to the injured person is a primary benefit of a corporation. The same benefit extends to debt and many other liabilities incurred by the corporation, not just to injuries.

Limitations to personal liability protection

Shielding the owner’s personal assets from business liabilities sounds very positive, and it is, but there are limitations to this protection. It’s important to remember that all of the business’ assets are available to satisfy business liabilities. The farmers market might have assets such as a vehicle, vending supplies, a valuable lease or other resources—these or the money from a sale of them can be taken by creditors. For this reason, a corporation is not a substitute for business insurance. Business insurance is the only way to protect business assets.

Follow best business practices

Bear in mind that state corporation statutes require business owners to follow certain rules and procedures. All state corporation statutes require a governance structure, which includes having shareholders, a board of directors, and officers. If the directors and officers fail in their duties, they can be personally responsible for the results. This is discussed more in the section on control and decision-making. The bylaws lay out these obligations, and as identified in the steps above, bylaws need to be written with an eye toward state law. The point is, the corporation needs to understand and follow the rules in the bylaws. If the corporation does not, it risks violating both state law and its own governance rules.

In addition, just as for an LLC, two essential ways to protect the shareholders’ personal assets are to adequately capitalize the corporation and keep the corporation’s financial affairs separate from the owners’ personal affairs. As a basic rule, a company is adequately capitalized if it can make due on its debts, or pay its monthly bills, so to speak. Anything less would be undercapitalized. In other words, if the corporation starts incurring more debt than it can reasonably pay off based on estimated revenue, the corporation may be considered undercapitalized. As a result, the shareholders may be personally liable to cover the business’ debt.

Courts are also able to access personal assets if the shareholders fail to keep the business funds separate from personal funds. This means a farmers market owner should not use business assets to pay for personal expenses. Owners should be sure to keep separate bank accounts, credit cards, and accounting records for the business entity. Owners who put personal resources into business accounts risk losing those resources.

Owners may be held personally liable for certain wrongful acts

In certain cases, the shareholders of a corporation can be held personally liable for a wrongful act that he or she commits during the course of business. For example, if a person commits a crime during the course of business (like fraud), he will be held personally liable for it.  Likewise, courts have found that while a corporate director or officer is not liable for wrongs committed by the corporation just by virtue of being a corporate director or officer, if he or she was directly involved in committing the wrong—for example, let’s say the owner of Sun Valley Farmers Market Inc. intentionally placed the concrete block in front of the person who tripped over it—then she may have personal liability for those actions. In other words, the corporation provides limited liability protection to its owners with respect to the corporation’s contractual obligations and debts, not to obligations and debts incurred by an owner’s personal wrongdoings.

Personal guarantees override personal liability protections

Of course, creditors, banks, and vendors are very familiar with the liability protections offered by a corporate structure. As a result, many banks and creditors will insist on a personal guarantee before they extend credit to a corporation. When an owner personally guarantees a debt or credit, the owner is, of course, personally responsible even though he formed a corporation.

The corporation is on the hook for civil and criminal wrongs of its agents

Just like any other business, a corporation is generally liable for civil and criminal wrongs committed by its agents. For example, if a corporation’s employee negligently injures a third party while acting on behalf of the corporation within the scope of his or her employment, the corporation may be liable for the employee’s negligent act. Likewise, if an employee commits a crime while acting on the corporation’s behalf, the corporation may be fined or some other sanction may be imposed as punishment for the violation. Second, a corporation may be liable for breaching contracts entered into by its directors, officers, and other agents. Third and finally, a corporation may be liable for violations of federal and state statutes governing employment, environmental protection, and securities, among other issues.

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Control & Decision-Making Rules Are in the Bylaws

Control and decision-making rules and procedures are outlined in the corporation’s bylaws. Corporations are required to write bylaws. The bylaws should spell out the relationship between the three main decision makers in a corporation: shareholders, directors, and officers. Of course, many small businesses don’t get around to writing bylaws that are very thorough. Or, they mistakenly write bylaw provisions that violate state law or another legal obligation such as a tax code provision. In this case, state and federal laws trump the corporation’s bylaws. For the purposes of this resource, we will assume readers research and write great bylaws they can rely on for good governance.


The bylaws are written both with an eye toward any mandatory provisions in state law and toward the business owners’ preferences. Every state has corporate or business association laws governing the formation, structure, and dissolution of corporations. These laws vary from state to state; however, the most common source of state law governing corporations for profit is the 1984 Model Business Corporation Act (MBCA). Because the MBCA has been adopted in most states, this toolkit will primarily reference the MBCA when describing what rules govern corporations.


Shareholders are the “owners.” They are the people who contribute money or labor in return for an ownership stake in the business. Legally speaking, shareholders generally have little say in the day-to-day operations of the company. Instead, shareholders get to elect the individuals who serve on the board of directors, generally at an annual meeting. The directors may or may not be shareholders themselves. The directors handle big picture decisions such as whether the farmers market should open at a new location, sign an expensive or long-term lease, or buy/sell large assets like a truck. Another key role of the board of directors is to appoint the corporation’s officers. Like the directors, the officers may or may not be directors or shareholders.

Corporations with a single owner

Some farmers market owners may be the sole shareholder and director, plus hold all officer positions, and be a vendor at their own farmers market! This isn’t necessarily a legal problem. People in this situation simply need to be conscientious about the decisions they make. If they are diligent about being fair and making thorough decisions, they’re not likely run into problems, legally speaking.

Board of Directors

The directors direct the corporation along its path and make big decisions that impact the financial affairs of the company. Legally speaking, the directors must uphold a “duty of care” and a “duty of loyalty.” A duty of care is to diligently act on behalf of the best interests of the corporation. For example, if the farmers market wants to buy a refrigerated truck, the directors need to carefully look into their options: Is purchasing better than leasing? Is the truck necessary? They need to take special care that the decision they make is not at all arbitrary and is in the best interest of the corporation. A duty of loyalty is to put the interest of the corporation above their own personal interest. For example, a director might also be a farmers market vendor—she may have a conflict of interest for decisions that relate to vendors. As a director, she wants the corporation to make money. As a vendor, she wants participation in the market to be affordable. These roles can conflict. To fully abide by her duty of loyalty, she should avoid participating in decisions involving that conflict. Many corporations purchase insurance for their directors and officers, which provides a defense and source of funds if a director or officer faces a claim for breaching these duties of care and loyalty.

Boards of markets that decide to become authorized SNAP retailers also have a responsibility to ensure that the market complies with relevant laws and regulations. For more information about a board's role in applying to accept SNAP benefits, click here.


The officers of a corporation are the ones making regular management decisions. The officers include the president (or chief executive officer, CEO), treasurer (or chief financial officer, CFO), and secretary. One person can hold multiple positions, or even all of them. This might sound silly, but recognizing these separate hats is an essential formality that must be upheld to maintain the integrity of a corporate entity. The president of a corporation generally manages the business of the corporation and has the authority to make contracts on behalf of the corporation, including employment contracts and contracts to borrow money. The secretary of a corporation generally keeps corporate records, including records of shareholder and director votes, resolutions, and proceedings. The treasurer of a corporation receives and disburses corporate moneys as authorized by the directors or other managing officers.

Succession Planning

It’s important for markets to think proactively about leadership changes before they happen. Keeping files organized and in one place can help create an easy, go-to spot for finding answers about the market and for ensuring continuity during transitions.  Learn more about how you can prepare for smooth transitions in Recordkeeping.

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Corporations Face Two Federal Tax Considerations

Corporations are liable for federal income taxes. In addition, corporations may be liable for a variety of state and local taxes, including franchise taxes, state income taxes, property taxes, and sales and use taxes. This section addresses exclusively federal income taxation.

Corporations may elect one of two federal income tax designations: “C Corporation” or “S Corporation.” The term “C Corporation” refers to a corporation that elects to be taxed under subchapter C of the Internal Revenue Code. Similarly, the term “S corporation” refers to a corporation that elects to be taxed under subchapter S of the Internal Revenue Code. The “S” stands for small business, and it’s the most common choice for small businesses of all types, including most farmers markets. The primary differences between the tax treatment of C and S corporations are discussed below.

C Corporation tax status

The Internal Revenue Code taxes C Corporations as legal entities separate and apart from their shareholders. Just as an individual files a tax return each year and pays taxes on income earned, so does a corporation. People say that C Corporations are “taxed twice” because the business may distribute the profit earned to shareholders as dividends after paying taxes. The individual shareholders then include the dividends in their income when calculating their own personal income tax responsibility.

S Corporation tax status

Corporations that qualify as small business corporations and file under subchapter S are not taxed at the corporate level under corporate tax rates. Instead, an S corporation is only taxed on its profit when individual shareholders report the business’ income on their personal tax returns. This is called “pass-through taxation.” Sole proprietorships, partnerships, and LLCs are all pass-through entities as well.

To file as an S Corporation, the corporation must meet the following criteria (as relevant to farmers markets):

  1. Have 100 or fewer shareholders
  2. All shareholders must be real persons
  3. No shareholders may be nonresident aliens
  4. Only one class of stock may be issued

An Employer Identification Number (EIN) Is Required

All corporations are required to get an Employer Identification Number (EIN), which is available free from the Internal Revenue Service (IRS). An EIN is often required to open a bank account for the corporation, even before the number is needed by the IRS as part of the annual taxation process.

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Bylaws Generally Serve as the Governing Law

Corporations have a relatively free hand to create the rules, procedures, and policies that work for their business. However, where a corporation’s bylaws are vague or conflict with state law, state law provides a default rule. In these cases, state law lays out basic rules for how the corporation should run and how responsibility is allocated. Each state has a general corporations statute (law) that sets forth requirements and default rules of operation for corporations.

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Frequently Asked Questions

  1. What is a benefit corporation? How is it different from other corporations?
  1. What is a benefit corporation? How is it different from other corporations?

    Farmers markets that have a charitable or educational mission but also want to make a profit for the benefit of the owners may want to consider forming a “benefit corporation.” The benefit corporation expressly allows owners of a company to establish a social or environmental purpose in addition to making profits. This is also known as the triple bottom line: people, planet, profits. The benefit corporation is not a nonprofit corporation or even a hybrid for-profit/nonprofit; it is a for-profit business entity that has a fundamental social or environmental purpose.

    Note that there's a significant difference between a "benefit corporation" and a “B Corporation.” A benefit corporation is a type of for-profit corporation which is established and governed under state law. By contrast, "B Corporation" is a certification that the private nonprofit organization "B Lab" provides to businesses that meet standards outlined by B Lab. This section focuses on business structures, not private certification programs. The following provides a brief overview of benefit corporations.

    How the benefit corporation evolved

    Corporate law and culture in the United States is fundamentally motivated by profits. It is not tailored to address the situation where a for-profit company wants to pursue a social mission. While some corporations do give back to society through donations or community programs, traditionally all corporate decision-making is justified in terms of maximizing profits for the benefit of the owners or shareholders. While most business owners realize that it’s important for a company to make profits, many are increasingly recognizing that it’s just as important to give back to society. That’s where the benefit corporation comes in.

    For more information on the key differences between a benefit corporation and a non-profit corporation, click here.

    Key differences between a benefit corporation and a traditional corporation

    Benefit corporations are very similar to corporations in terms of the formation process, liability, governance, and taxation. A benefit corporation has three additional obligations. First, a benefit corporation must have a purpose to create a public benefit. This can be social, environmental, or otherwise—including providing fresh and healthy food to the community. This purpose must be clearly stated in the articles of incorporation. Second, the benefit corporation must have a system for considering the impact of its business on non-financial stakeholders—including the community and the environment—when making business decisions. Finally, the benefit corporation must file an annual benefit report that outlines its social and environmental performance. The annual benefit report must reference third-party social and environmental standards and must be available to the public, such as being posted on the farmers market website.

    Forming a benefit corporation

    The very first step in forming a benefit corporation is to verify that the benefit corporation option exists in the state where the farmers market will be incorporated. The following states currently recognize benefit corporations:

    Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Washington, D.C. (Note: the state of Washington has created the Social Purpose Corporation instead of recognizing benefit corporations. For all intents and purposes, it has the same effect.)

    Where a benefit corporation is a choice, the entity is generally formed using the same process as is used to create a corporation. For more information about how to create a corporation, click here.

    The main difference between creating a benefit corporation and a regular corporation is in the exact language used in the articles of incorporation and bylaws.

    Farmers market owners should investigate the particular requirements of their state, but most states require these two statements to be included in the articles of incorporation:

    1. The articles likely need to state that the corporation is formed under the state’s benefit corporation statute, and may need to reference the particular statute. Where an online form or template is provided, this should be included.
    2. The articles likely need to state a qualifying purpose for the benefit corporation. Broadly speaking, state laws require that the benefit corporation create a benefit such as serving low-income communities or protecting the environment. State-specific research is necessary to determine what type of purpose statements are required.

    As to the bylaws, the benefit corporation’s bylaws should create a procedure for the writing, approving, and submitting of the benefit corporation’s annual benefit report, which is required by most states. Some benefit corporations may also want to include bylaw provisions that create a process for ensuring the business meets its public benefit. For example, a farmers market may want to require specific reports regarding the business’ public benefit be reviewed and approved by the directors on a regular basis.

    Liability includes considering non-financial stakeholders

    Regarding liability for debts, injury, and other legal obligations, a benefit corporation is treated the same as a regular corporation. For more information, visit the corporation liability section.

    As to benefit corporations specifically, these entities incur an additional and unique legal liability that regular corporations do not experience. A benefit corporation’s directors have a fiduciary duty to consider the interests of non-financial stakeholders—such as the community and the environment—when making business decisions. A benefit corporation’s directors and shareholders have a right to sue the corporation or its directors to enforce this duty. Where regular corporation officers are obligated to make informed decisions, broadly, benefit corporation officers must also specifically consider non-financial stakeholders in the decision-making process.

    Decision-making must take into account the stated social or environmental purpose

    A benefit corporation has the same basic, decision-making structure as a for-profit corporation. The benefit corporation must have shareholders, who generally elect directors to oversee the corporation’s day-to-day affairs. In turn, a benefit corporation’s directors may delegate managerial and administrative tasks to officers, typically including a president (or chief executive officer), vice president, secretary, and treasurer.For more information, visit the corporation control and decision-making section.

    A benefit corporation may have leadership positions not present in a traditional corporation. There may be a “benefit director” and “benefit officer,” who perform duties related to the benefit corporation’s social and environmental purpose. Such duties include preparing the annual report and ensuring that all decisions include consideration of the declared public benefit. The benefit director must be independent. This means that they cannot have meaningful financial or familial ties to the benefit corporation. For example, the benefit director cannot be an employee or shareholder of the benefit corporation or an immediate family member to an officer or director.

    A benefit corporation is subject to the same requirements as a traditional corporation with respect to adopting and amending articles of incorporation and bylaws. However, these governing documents must incorporate the benefit corporation's stated purpose and requirements for considering this purpose in all decisions.

    Taxation is the same as for other corporations

    A benefit corporation is taxed in the same manner as a traditional for-profit corporation (i.e., as either a C or S Corporation). That is, any income a benefit corporation earns is subject to federal income taxation once at the business level, and again when distributed to shareholders, unless the corporation files under subchapter S. For more information, please read the corporation taxation section.

    Notably, although benefit corporations meet higher standards for corporate purpose, accountability, and transparency than traditional corporations, they are currently ineligible for the federal income tax exemptions available to nonprofit corporations.

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Farmers Market Legal Toolkit