September 26, 2011

Benefit Corporations, Benefit LLCs, and Marketing

In June, Maryland saw the creation of America's first benefit LLC, Clean Currents, a green energy company. Clean Currents was created under the recently passed SB 595, a follow up to the state's benefit corporation law passed last year. SB 595 was sponsored by State Senator Jamie B. Raskin (D-Mont).

Two weeks ago, Governor Martin O'Malley attended the inauguration of Blessed Coffee, a Takoma Park coffee shop. Blessed Coffee is a registered benefit corporation under the law passed last year. The company has pledged to allocate 50% of its net profits from wholesale revenue to social programs in Ethiopia's coffee growing regions, and 50% to community based organizations. O'Malley said of Blessed Coffee that “(i)t's a corporation that looks at not only the bottom line of profit, but also the bottom line of social responsibility.”
The Washington Post article, Takoma Park coffee firm holds 'Blessed' event, in quoting Raskin highlights one of the challenges the state has in encouraging benefit corporations:

“'The law allows community-minded companies to take the high bid,'    Raskin said.
The main benefit of the law, however, is as a branding and marketing tool. The community feels that it's a part of the business, and people are often willing to pay for products when they know the money goes toward groups and causes they support, Raskin said.” (sic)
Cause marketing can be effective. A 2010 study said that 41% of Americans have purchased a product in the past year because the product was associated with either a social or environmental cause. The same study said that 88% of Americans think it is acceptable for a company to involve a cause or issue in its marketing; contrast this to the Millenial Americans, of whom 94% think it is acceptable for a company to involve a cause or issue in its marketing. Additionally, Millenials use a company's support of social or environmental issues to determine other corporate interactions. 87% of Millenials use social and environmental causes as a benchmark to determine where to work. 79% of Millenials use the same benchmark to determine where to invest. As Millenials become more active participants in the marketplace, benefit corporations and benefit LLCs are poised to reap the benefits (pun intended).

September 19, 2011

Green jobs in Maryland

Last week, I read an interesting article in the Baltimore Sun entitled "Green jobs economy has hits and misses in Maryland". The article said that "(c)lean jobs locally grew 2.6 percent annually from 2003 through last year..." - a rate which is apparently indicative of an uneven pattern of growth for Maryland's green economy.

Maryland has made many efforts to stimulate the green economy. You may recall my blog a few weeks ago on the recent legislation pertaining to B Corps. Additionally, in 2009, Maryland created the non-profit Maryland Workforce Corporation to provide job training, which received a $4 million grant from the U.S. Department of Labor’s Employment and Training Administration to benefit it's Mid-Atlantic Regional Collaborative Green Consortium.  As part of the grant, Maryland Workforce Corporation has a website called MARC Regional Green Jobs, which provides a posting board for employers to list green jobs that are available.

MARC defines green jobs as "jobs involved in economic activities that help protect or restore the environment or conserve natural resources". These jobs deal with renewable energy, energy efficiency, greenhouse gas reduction, pollution reduction and cleanup, recycling and waste reduction, agricultural and natural resource conservation, and education, compliance, public awareness and training. These jobs are expected to provide direct and indirect green goods and services, specialized inputs, and the distribution of green goods.

If you have questions on how green jobs can benefit your business, please contact our office.

September 18, 2011

Purpose driven profits

Howard Magazine has a great article in it's September 2011 edition on local businesses with purpose driven profits.

September 12, 2011

Women-Owned Small Business Federal Contract Program

The Women-Owned Small Business Federal Contract Program was created to allow equal access to federal contracts by women-owned small businesses (WOSBs), and to economically disadvantaged women-owned small businesses (EDWOSBs). This program allows contracting agencies to set aside certain federal contracts for WOSBs and EDWOSBS. Businesses who want to participate in the program must register with the Business Partner Network. The business must have a Data Universal Numbering Systems (DUNS), which is provided by Dun & Bradstreet; a Tax Identification Number; and data on the business, including the number of employees and basic accounting.

A business must satisfy certain criteria to be eligible for the program. In addition to being within one of approved North American Industry Classification Systems codes (opens a spreadsheet), the business must meet certain ownership and control standards, set forth below:

At least 51% unconditional and direct ownership by women
At least 51% unconditional and direct ownership by women
At least 51% unconditional and direct control by women
At least 51% unconditional and direct control by women
A woman must manage day-to-day operations, make long term decisions for the business, hold the highest officer position, and work at the business full-time during working hours
A woman must manage day-to-day operations, make long term decisions for the business, hold the highest officer position, and work at the business full-time during working hours
No limit
The woman in charge of operations must have a personal net worth of less than $750,000, with an AGI of less than $350,000 over the last three years prior to certification, and a FMV of all assets of less than $6,000,000.

A business can either self-certify, or be certified by one of four groups recognizd by the U.S. Small Business Administration. The four groups are the El Paso Hispanic Chamber of Commerce, the National Women Business Owners Corporation, The US Women's Chamber of Commerce, and the Women's Business Enterprise National Council.

The WOSB Federal Contracting Program is important to Howard County because of the proximity of Ft. Meade. Under the Base Realignment and Closure Act (BRAC), Howard County expects Ft. Meade to gain 22,000 new jobs. Local businesses can benefit by participating in federal contracting opportunities associated with the base.

If you have any questions about how either the WOSB program or BRAC can benefit your business, please feel free to contact our office.

September 6, 2011

Here comes the story of the Hurricane

Two natural disasters in one week? As a good friend of mine said the other day, I thought that I was getting away from bad weather when I moved here from Kansas. Nonetheless, Hurricane Irene struck Howard County with some driving rain over the last weekend of August. Fortunately, we did not lose power at my home, and aside from some impromptu trench digging to alleviate a giant puddle threatening to flood our patio, we did not have any hurricane related damage.

Others were not so lucky, with a few still without power as of Labor Day. A friend's neighbor in Silver Spring had a very large pine tree down in their yard. The uprooted tree pulled down power lines and left the neighborhood without electricity for days. Although in this instance the tree seemed to be contained on one property, the implications could have been entirely different had the tree fallen into an adjacent property.

In tort law, there is a concept called intervening force. Intervening force is when the acts of a third person intervene between the defendant's conduct and the plaintiff's injury. One type of intervening cause is known as an “act of God” or “force of nature”. Events, such as hurricanes, are frequently considered such acts. Sometimes, if an intervening force is great enough, it becomes a superseding force and the defendant's negligence is cut off from liability.

The circumstances are different if the defendant knew that there was a problem with his property. For example, In Kimble v. Macintosh Hemphill Co, a Pennsylvania case from 1948 where a negligently maintained roof collapsed in unusually high winds, the court ruled that “(o)ne who fails in his duty to remedy a defective or dangerous condition is liable for injuries resulting therefrom.” Similarly, if a landowner knows he has a damaged tree on his property, and the tree falls into the neighbor's property because of the damage, it is likely that he would have liability for the damage created by the tree.

Insurance policies create another wrinkle in hurricane damage. As the Baltimore Sun reported on September 2nd, filing an insurance claim for damage during the hurricane can result in insurers charging a hurricane deductible. However, this deductible can only be imposed if the location was under a hurricane warning. On the Western shore, only St. Mary's county was under a hurricane warning; the remaining counties under the warning are all located on the Eastern shore (Caroline, Dorchester, Somerset, St. Mary's, Talbots, Wicomico and Worcester). More information regarding insurance issues raised by Hurricane Irene can be found at the Maryland Insurance Administration website. They have provided a FAQ about weather related losses (link opens a .pdf file).

If you have any further questions, please feel free to contact our office.