By MIRANDA ZHANG,

Special to The Courant

Secretary of the State Denise Merrill shows off the form that businesses in Connecticut can use as of Oct. 1 to register to become a Benefit Corporation. Behind her are, left, Kate Emery, founder and CEO of reSET as well as The Walker Group, who was instrumental in pushing for the… (David Moran)

HARTFORD — Bryan Nurnberger didn’t wait long to register his coffee company, Simply Smiles Products Corp., as a “benefit corporation” under a new Connecticut law that took effect Oct. 1.

His lawyer faxed in the paperwork at 12:17 a.m.

In so doing, Simply Smiles assured itself the distinction of becoming the first B Corp in Connecticut.

The law gives a legal identity to benefit corporations and helps them serve the community as their priority as opposed to making profits. Social activists and lawmakers in the state hope the law attracts and keeps social entrepreneurs in the state.

It was a happy return to the state for Nurnberger. Though his business was based in Westport since 2012, it was incorporated as a benefit corporation only in New York, which already had a law allowing the designation.

Wednesday, when Connecticut’s own law took effect, the 37-year-old entrepreneur made sure he was first in line.

“They [the Secretary of the State’s office] opened it up for incorporation at 8:30 this morning,” Nurnberger said. “And the first one on the list was us. You know, Oct. 1, 8:30 and zero seconds. That was a pretty big deal.”

Also registering as a benefit corporation Wednesday was Kate Emery, CEO of The Walker Group in Farmington and reSET, the Social Enterprise Trust, in downtown Hartford.

She noted that more than 20 companies registered on the very first day, “which I think sends out a message.

“If we are not the highest in the nation, we are certainly, per capita, the state with the most social entrepreneurs who have registered on the first day,” Emery said.

“There’s a lot of good reasons for Connecticut to be a hub of social enterprise,” Emery said. “We have a lot of socially innovated institutions. We’ve got great educational institutions that are progressive and full of kids with bright ideas. And we have a lot of money that’s interested in doing things to make a difference.”

First State To Allow Forever B Corp

At a midday press conference, 25-year-old Jeffrey Devereux stood with other young business owners behind several speakers who praised the new law, including Secretary of the State Denise Merrill and Lt. Gov. Nancy Wyman.

Devereux was first in the Secretary of the State’s office Wednesday morning to register in person. After waiting 20 minutes and paying $250 as a filing fee, he registered his new business, Hartford Athletic Club.

Without a business educational background, he got support from ReSET, a nonprofit group that helps social enterprise entrepreneurs establish and preserve their companies.

ReSET held the conference at an office it shares with other businesses in downtown Hartford. The group has spent the past four years promoting benefit corporations and the law to protect B-Corp-like businesses in the state.
Connecticut joined 25 other states, including New York and Massachusetts, and the District of Columbia to have a benefit corporation law in place. But it’s the only state that allows the social enterprise entrepreneurs to pass on the business to others and, under a clause called “legacy preservation provision,” have it retain its benefit corporation status.

“That’s very appealing for us,” Nurnberger said. “New York does not have that. So if I were to get hit by a bus going home from work today and we have that ‘legacy provision’ in place, we would be a benefit corporation forever. Somebody couldn’t come along and say, ‘yeah, you know what, I’m going to change this to a LLC … and use all that good will that we generated to make a bunch of money.'”

In Connecticut, if the majority or all of the shareholders vote yes to undo the incorporation of a B-Corp., the company can rewind the status, Emery said.

Simpler Process For Simply Smiles

Nurnberger started his business as a nonprofit group, Simply Smiles Inc., in 2001 and sold 8,000 bags of coffee in the first year. His company, he said, has helped impoverished children and their families, and communities in Oaxaca, Mexico and South Dakota.

In 2012, he decided to create a benefit corporation, Simply Smiles Products Corp., to head off any concerns that might arise about unrelated business income.

“You cross the threshold of sales and you can pay taxes,” Nurnberger said. “But it was all very gray. It wasn’t clean. You could put your nonprofit status in jeopardy if you become too lopsided toward being a coffee company,” Nurnberger said.

Connecticut had no B Corp law at the time, Nurnberger said, so had to register Simply Smiles as a B Corp in New York instead.

“[Simply Smiles is] not in existence [primarily] so I can personally make a lot of money or anybody else can make a lot of money. The reason why it exists is to sell a product that will have a social impact,” Nurnberger said. “In our case, that will benefit the work that the charity organization, Simply Smiles, does.”

The new law allows a for-profit company to have that as its first priority.

“It provides a legal structure that says, ‘Yeah, you exist to be do something for the social good.’ That’s the most important thing.”

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