Italy has become the first country outside the USA to approve the introduction of a new law on benefit corporations, which allows companies to register as B Corps.
The approval of the B Corp legislation, which entered into force in Italy on January 1st 2016 together with the Stability Law, could have important consequences for the Italian third sector as a whole.
B Corps, which will be known as ‘Società Benefit’ in Italy, are for-profit companies which have completed a rigorous certification process to meet standards of social and environmental performance, accountability and transparency. The proposed law aims to allow for-profit companies to have profit distribution as their final goal, but to achieve a public benefit at the same time, in a responsible and transparent way. Whilst there is an increasing appetite and interest in the B Corp movement globally, the recently approved legislation puts Italy at the forefront of international developments.
THE NEW B CORP LAW AT A GLANCE
The draft legislation is very concise and clear.
The core principles in the legislation are as follows:
EMPHASIS ON ENTREPRENEURSHIP
During the last few years the core debate around social business has shifted from a debate about the choice of legal structure to a debate about the type of activities to be undertaken – there is increased emphasis on “what a company does”, rather than “how a company is structured”.
Until now, Italy has lagged behind the rest of Europe and the US in developing legislation suitable for social enterprises – for example, the UK introduced Community Interest Companies in 2005. It will be interesting to see how the Italian third sector reacts to the new legislation, which has the potential to transform the way social enterprise and social business movement develops in Italy.
Visit the Member Resources section to see Roberto’s article on the future of the Italian third sector.
Board Member of ESELA
Partner of R&P Legal in Italy