Pending Certification Term Sheet

Pending Certification Term Sheet1
For all companies applying for Pending Certification designation.
Introduction
This document outlines the terms for companies applying for Pending Certified B Corporation status.™
B Lab is a nonprofit organization dedicated to using the power of business to solve social and
environmental problems. B Lab drives systemic change through several interrelated initiatives:
1) building a community of Certified B Corporations to make it easier for all of us to tell the difference
between ‘good companies’ and just good marketing; 2) passing benefit corporation legislation to create
a new corporate form that meets higher standards of purpose, accountability, and transparency;
3) driving capital to higher impact investments through use of its B Analytics and GIIRS Ratings platform;
and 4) offering businesses the B Impact Assessment as a free, powerful tool to measure, compare, and
improve their social and environmental performance.
Certified B Corporations meet high standards of social and environmental performance, accountability,
and transparency, building collective voice for a global movement to redefine success in business
through the power of the unifying B Corporation brand.
Governance Overview
B Lab is governed by an independent Board of Directors and the performance standards used to certify B
Corporations are governed by an independent Standards Advisory Council. Membership of both is
transparent and available at bcorporation.net. All submissions for B Corporation™ certification and
pending certification status will be reviewed by B Lab; acceptance into and continued participation in
the B Corp community is at the sole discretion of B Lab and its Board of Directors.*
Terms
The term of this Pending Certification status is 12 months from the date on this signed term sheet.
Companies designated as Pending Certified B Corporations™ will:
• Commit to completing full B Corporation Certification process within 12 months of earning Pending
Certified B Corporation status. Full certification terms can be found here. If the Company does not
complete the full certification process in said timeframe, the Company will cease to make any reference
to Pending Certified B Corporation per intellectual property provisions below.
1
‘B Corporation’, ‘the B Corporation Seal’, and ‘the change we seek’ are trademarks of B Lab, Inc
©2014 B Lab, Inc
• Meet performance standards:
- Complete a prospective B Impact Assessment that envisions the positive impact the business
intends to create through its business and operations as of the first anniversary of earning
Pending status; and
- By signing this Pending Certification Term Sheet, indicate that it has read the Guidance on
Meeting the Performance Requirement for B Corp Certification.
• Meet the legal requirement for full B Corp certification prior to applying for Pending Certification
status by:
- Including the B Corp Legal Framework in company’s operating agreement or articles of
incorporation, or electing benefit corporation status. Learn why and how.
Note: While corporations in AL, AK, KS, MI, MT, NC, OK (states with neither a benefit
corporation law nor a constituency statute or other enabling law) can earn Certified B
Corp status through the normal process, start-ups that are incorporated in these states
as traditional corporations can only earn Pending status by changing their state of
incorporation or corporate structure and completing one of the two options above.
- In the event of a change of control of the Company during the Term, including a public
offering, the Company is required to re-apply for Pending Certification within 90 days of the
effective date of the change of control.
• Abide by intellectual property requirements:
- Use only B Lab’s intellectual property related to the name ‘Pending Certified B Corporation™
and the ‘Pending B Corporation™ Seal’ consistent with the ‘Brand Usage Guidelines’ provided
by B Lab;
- Refrain from using the standard Certified B Corporation logo, the company’s B Score or B
Impact Report, and any other intellectual property related to B Corporations, the B Impact
Assessment, or B Lab during its Pending Certification term;
- Remove any and all intellectual property related to ‘Pending Certified B Corporation’,
‘Certified B Corporation,’ and related logos should the business fail to convert from Pending to
Certified B Corporation status within 12 months of earning Pending status; and
- Allow the Company’s names and logos to be used by B Lab for the limited purpose of
promoting the community of B Corporations.
• Sign the B Corporation™ Declaration of Interdependence provided herein as a symbol of its
commitment to our shared collective purpose.
• Agree to a more limited level of access to the services and support B Lab provides to Certified B
Corporations
- Company is able to attend B Corp events and engage as a soon-to-B peer with the
community of Certified B Corporations;
- Company is able to utilize its Pending Certification status to attract & engage employees,
generate press, attract investors, protect mission, and build credibility with retail or other
business partners;
- Company will be not eligible for services such as B2B connections, marketing support, profile
on bcorporation.net, free GIIRS Rating, or discounts.
©2014 B Lab, Inc
• Pay B Lab a Pending Certified B Corporation fee of $500, with the understanding that regular annual
certification fees will apply once full B Corporation Certification is achieved (table below)
Annual Sales
$0-$999,999
$1 MM - $4,999,999
$5 MM - $9,999,999
$10 MM - $19,999,999
$20 MM - $49,999,999
$50 MM - $99,999,999
$100 MM+
Annual Fee
$500++
$1,000++
$2,500
$5,000
$10,000
$15,000
$25,000
Indemnification
To the extent permitted by applicable law, in no event will either B Lab or the Company be liable to each
other for any direct, special, indirect, consequential, or incidental damages or any other damages of any
kind even if B Lab or the Company has been advised to the possibility thereof. B Lab and the Company
shall indemnify and hold harmless each other from all Claims, except to the extent resulting from bad
faith, intentional misconduct, or gross negligence.
Commitment
By signing below, I agree to the above terms.
Director/Officer
Director/Officer, B Lab
Company
Date
Date
©2014 B Lab, Inc
Footnotes to Term Sheet for Pending Certified B Corporations TM
* Complaints Procedure
Maintaining the credibility and rigor of the B Corp Certification is paramount to B Lab. B Lab and its Board of
Directors have sole discretion over the acceptance into and continued participation in the B Corp community, and
B Lab takes complaints from the community very seriously. Typically there are two types of complaints that B Lab
reviews:
- Complaints alleging intentional misrepresentation of a social or environmental practice as reported in
the B Impact Assessment.
- Material, credible, and specific allegations that indicates a breach of our community's principles of
transparency and accountability and the core values as expressed in the B Corporation Declaration of
Interdependence.
An investigation of the complaint is conducted by B Lab Staff, and the results of the investigation are presented to
B Lab's Standard's Advisory Council (the "SAC"). The SAC is an independent governing body that oversees the
performance standards of the B Corp certification. Complaints are typically resolved in the following three ways:
- Certification upheld
- Probation with required, specific remedies
- Certification revoked
The resolution of the complaint may be appealed by the Company directly to B Lab's Independent Board of
Directors. The resolution of such appeal by the Independent Board of Directors is binding.
++
Prepayment
Companies must provide credit card payment of their Pending Certification fee prior to earning Pending
Certification status.
©2014 B Lab, Inc
We envision a new sector of the economy which harnesses
the power of private enterprise to create public benefit. This sector is comprised
of a new type of corporation – the B Corporation™ – which is purpose-driven
and creates benefit for all stakeholders, not just shareholders.
As members of this emerging sector and as entrepreneurs and investors in
B Corporations™,
We hold these truths to be self-evident:
That we must be the change we seek in the world;
That all business ought to be conducted as if people and place mattered;
That, through their products, practices, and profits, businesses should aspire to
do no harm and benefit all.
To do so, requires that we act with the understanding that we are each
dependent upon another and thus responsible for each other and future
generations.
Director / Officer
Date
Company
©2014 B Lab

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