Over the last year or so, i’ve seen a trend in more businesses seeking B-Corp®️ certification. The appeal is clear: a public commitment to balancing profit with purpose, being accountable to all stakeholders, and embedding good governance. But behind the branding, there are legal steps you must take before you can call yourself a B-Corp®️. Although reasonably straightforward, I’ve helped a number of clients achieve the legal steps. This article walks through those steps, what to check in your current constitution, and when you might need new Articles or a Shareholders’ Agreement.

What is the Legal Requirement for UK B-Corp®️ Certification?

Before certifying as a B-Corp®️ in the UK, your company must embed stakeholder-focused legal language into its constitutional documents. This is called the Legal Requirement, and it ensures that directors commit to considering not just shareholders, but employees, suppliers, society and the environment when making decisions. 

Here are the key points:

1. The legal requirement must be built into the articles of association (or other governing documents) for companies (or equivalent for LLPs etc). You must adopt specific wording provided by B Lab UK, verbatim. 

2. Companies with 0-49 full-time employees must make the change before certification. For companies with more than 50 employees, there is more time (depending on structure): limited companies, one year; LLPs, 90 days. 

3. The process includes approval by the board, then approval by members/shareholders via a special resolution(typically needing 75% majority), then filing the amended articles with Companies House (using the correct form) within 15 days. 

4. The legal requirement also includes preparing and circulating an Impact Report to the members. While this is the only statutory requirement for circulation, B Lab UK urges companies to publish it for all stakeholders. 

5. If you already have previous versions of the B-Corp®️ legal requirement wording in your constitution, that doesn’t prevent you from certifying or re-certifying — but you must ensure you adopt the current (2024) version when next updating your constitution. 

6. The wording must be adopted verbatim. If for some reason, that is impossible, you may attempt to propose an alternative with legal justification, but your application may take longer and may require acceptance by B Lab’s Legal Committee. 

Reviewing Your Existing Constitutional Documents

Many businesses already have articles of association (or equivalent) and sometimes shareholder / member agreements in place. Before you proceed with amendments, do a thorough review. Key things to check:

Do You Need New Articles or a Shareholders’ Agreement?

In many cases, simply amending existing articles will be sufficient, provided the current articles are compatible (i.e. amendments are possible by special resolution etc).

Here are situations when you might need to go further:

1. Incompatible Articles

   If your articles have no capacity for a stakeholder clause or are otherwise incompatible (for example, extremely restrictive objects clauses, onerous shareholder vetoes), then you may need entirely new articles to accommodate the legal requirement.

2. Lack of clarity or misalignment in current agreements

   If your shareholder or membership agreements create obligations that run counter to stakeholder obligations (e.g. demanding maximum profit regardless of environmental or social impacts), then those agreements may need revising or clauses added to align with B-Corp®️ requirements.

3. Changes in ownership or fundraising being anticipated

   If you expect a capital raise, or change in shareholders, or sale, it might be wise to put in place a shareholders’ agreement (or amend the current one) that ensures the mission / stakeholder obligations survive those change events.

4. LLPs or other structures

   The legal requirement differs depending on structure. You may need bespoke documents in LLP agreements, or amendments to partnership agreements. The governance model may be more complex.

The Step-by-Step Process to Legal Compliance

Here’s a roadmap you (or your legal adviser – hopefully me!) should follow to satisfy the B-Corp legal requirement in the UK:

1. Obtain the correct wording from B Lab UK for your legal structure. (Limited company, LLP, CLG, CIC etc.) 

2. Review your current constitutional documents, directors’ duties, shareholders’ agreements for compatibility.

3. Board review & alignment – board discusses and formally approves adopting B-Corp legal wording; consider engaging your legal counsel and internal stakeholders.

4. Shareholder / Member resolution – pass a special resolution (usually 75 %) to amend the articles or adopt new documents. If a written resolution suffices (for private companies) or if a general meeting is required, check your articles.

5. File necessary documentation with Companies House, including the amended articles, the special resolution, and correct form (Form CC04 for articles amendments). Must be filed within 15 days of passage. 

6. Prepare and circulate the Impact Report to members; consider making it publicly available to all stakeholders.

7. Maintain compliance over time: ensuring that your governance practices, board decisions etc actually reflect the stakeholder-consideration commitments; updating constitutional documents when needed (e.g. when next revising your Articles) to the latest B-Corp wording.

How I Can Help

As a solicitor, I can assist with:

• Reviewing your current articles of association and shareholder agreements to see where changes are needed.

• Drafting the new wording (verbatim from B Lab) and inserting it appropriately.

• Advising on whether your current articles suffice, or whether entirely new articles are needed.

• Drafting or revising a shareholders’ agreement to reflect the mission-locking, exit and fundraising implications.

• Ensuring you comply with Companies House filing requirements and meeting board/shareholder resolution requirements.

Conclusion

Becoming a B-Corp®️ is more than just a label. The legal requirement ensures your company is structured to act in the interests of more than just shareholders, now and in the future. With proper legal structuring—amended articles, appropriate agreements, clear governance – you can embed your mission securely. It costs some effort and thought, but for many businesses, the long-term benefits (trust, purpose, resilience) are worth it.

If you’re considering B-Corp®️ certification and you’d like help reviewing or drafting your constitutional documents, I’d be very pleased to help. Feel free to get in touch.

Note: B Corp® is a registered trade marks of B Lab, used here to describe the certification process. I am not affiliated with, endorsed by or sponsored by B Lab. This article is for general information only and does not constitute legal advice.