Skip to main content

Incorporating Promptable as a Delaware Public Benefit Corporation (PBC)

Location: owl-strategy/legal/promptable_pbc_strategy.md

Why Choose a Public Benefit Corporation (PBC) Structure?​

A Public Benefit Corporation (PBC) is a for-profit corporate entity that legally embeds a social or environmental mission into its charter. For Promptable, this structure aligns with our dual objectives:

  • Mission Alignment: Ensures that our commitment to open science, reproducible workflows, and community-driven AI development is not just aspirational but legally recognized.

  • Legal Protection: Directors are protected when making decisions that balance profit with public benefit, reducing the risk of shareholder lawsuits solely focused on profit maximization.

  • Investor Attraction: Appeals to impact investors who prioritize Environmental, Social, and Governance (ESG) criteria alongside financial returns.

Delaware's General Corporation Law (§362) defines a PBC as a corporation that is intended to produce a public benefit and to operate in a responsible and sustainable manner. Key requirements include:

  • Public Benefit Statement: The certificate of incorporation must state one or more specific public benefits the corporation will promote.

  • Name Designation: The corporation's name must include "Public Benefit Corporation," "P.B.C.," or "PBC."

  • Director Duties: Directors must balance the pecuniary interests of shareholders, the best interests of those materially affected by the corporation's conduct, and the public benefit identified in the certificate of incorporation.

  • Biennial Reporting: PBCs must provide shareholders with a report every two years detailing the corporation's promotion of the public benefit(s) and the interests of those materially affected by the corporation's conduct.

Steps to Register Promptable as a Delaware PBC​

  1. Name Reservation:

    • Ensure the name "Promptable PBC" is available and complies with Delaware naming requirements.

  2. Draft Certificate of Incorporation:

    • Include:

      • Corporate name with PBC designation.
      • Statement of public benefit(s).
      • General business purpose.
      • Registered agent information.
      • Authorized stock details.

  3. File with Delaware Division of Corporations:

    • Submit the certificate along with the required filing fee (minimum $89, additional fees may apply based on the number of pages and stock details).

  4. Obtain Employer Identification Number (EIN):

    • Apply through the IRS for tax identification.

  5. Draft Bylaws and Organizational Resolutions:

    • Outline governance structures, director responsibilities, and operational procedures.

  6. Biennial Benefit Reporting:

    • Establish processes for measuring and reporting on the public benefit objectives.

Public Benefit Corporations in the United States​

As of recent data:

  • Delaware: Over 1 million business entities are incorporated in Delaware, with a growing number choosing the PBC structure due to its flexibility and legal protections.

  • Nationwide: More than 3,600 PBCs have been formed across at least 37 states, reflecting a significant shift towards mission-driven business models.

Aligning Promptable's Mission with PBC Status​

By adopting the PBC structure, Promptable can:

  • Legally Prioritize Mission: Embed our commitment to open science and ethical AI development into our corporate DNA.

  • Attract Like-Minded Stakeholders: Appeal to employees, investors, and partners who value social impact alongside financial success.

  • Ensure Long-Term Mission Fidelity: Protect our founding principles through changes in leadership or ownership.

Conclusion​

Incorporating Promptable as a Delaware Public Benefit Corporation offers a balanced approach to achieving our financial goals while steadfastly committing to our social mission. This structure provides legal safeguards, enhances our brand reputation, and positions us favorably in the eyes of impact-focused investors and collaborators.

For further guidance on the incorporation process or to initiate the registration, please consult with legal counsel experienced in Delaware corporate law.