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| PRIOR PRINTER'S NO. 1999 | PRINTER'S NO. 3330 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY DENLINGER, DePASQUALE, CUTLER, BLOOM, BOYD, BRIGGS, COHEN, CREIGHTON, DALEY, FLECK, GABLER, GEIST, GROVE, HICKERNELL, KILLION, LONGIETTI, MILNE, MURT, PYLE, RAPP, SWANGER, WAGNER AND PAYTON, JUNE 2, 2011 |
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| AS REPORTED FROM COMMITTEE ON COMMERCE, HOUSE OF REPRESENTATIVES, AS AMENDED, APRIL 2, 2012 |
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| AN ACT |
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1 | Amending Title 15 (Corporations and Unincorporated Associations) |
2 | of the Pennsylvania Consolidated Statutes, further providing |
3 | for benefit corporations. |
4 | The General Assembly of the Commonwealth of Pennsylvania |
5 | hereby enacts as follows: |
6 | Section 1. Article C of Subpart B of Title 15 of the |
7 | Pennsylvania Consolidated Statutes is amended by adding a |
8 | chapter to read: |
9 | CHAPTER 33 |
10 | BENEFIT CORPORATIONS |
11 | Subchapter |
12 | A. Preliminary Provisions |
13 | B. Corporate Purposes |
14 | C. Accountability |
15 | D. Transparency |
16 | SUBCHAPTER A |
17 | PRELIMINARY PROVISIONS |
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1 | Sec. |
2 | 3301. Application and effect of chapter. |
3 | 3302. Definitions. |
4 | 3303. Formation of benefit corporations. |
5 | 3304. Election of an existing business corporation to become a |
6 | benefit corporation. |
7 | 3305. Termination of benefit corporation status. |
8 | § 3301. Application and effect of chapter. |
9 | (a) General rule.--This chapter shall apply to all benefit |
10 | corporations. |
11 | (b) Application of business corporation law generally.--The |
12 | existence of a provision of this chapter shall not of itself |
13 | create any implication that a contrary or different rule of law |
14 | is or would be applicable to a business corporation that is not |
15 | a benefit corporation. This chapter shall not affect any statute |
16 | or rule of law that is or would be applicable to a business |
17 | corporation that is not a benefit corporation. |
18 | (c) Laws applicable to benefit corporations.--Except as |
19 | otherwise provided in this chapter, this subpart shall apply |
20 | generally to benefit corporations. The specific provisions of |
21 | this chapter shall control over the general provisions of this |
22 | subpart. A benefit corporation may be simultaneously subject to |
23 | this chapter and one or more other chapters of this article. |
24 | (d) Organic records may not be inconsistent.--A provision of |
25 | the articles or bylaws of a benefit corporation may not relax, |
26 | be inconsistent with or supersede any provision of this chapter. |
27 | § 3302. Definitions. |
28 | The following words and phrases when used in this chapter |
29 | shall have the meanings given to them in this section unless the |
30 | context clearly indicates otherwise: |
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1 | "Benefit corporation." A business corporation that has |
2 | elected to become subject to this chapter and whose status as a |
3 | benefit corporation has not been terminated as provided in this | <-- |
4 | chapter. |
5 | "Benefit director." The director designated as the benefit | <-- |
6 | "Benefit director." Either: | <-- |
7 | (1) the director designated as the benefit director of a |
8 | benefit corporation as provided in section 3322 (relating to | <-- |
9 | benefit director). (relating to benefit director); or | <-- |
10 | (2) a person with one or more of the powers, duties or |
11 | rights of a benefit director to the extent provided in the |
12 | bylaws under section 3322. |
13 | "Benefit enforcement proceeding." A claim or action brought | <-- |
14 | directly by a benefit corporation, or derivatively on behalf of |
15 | a benefit corporation, against a director or officer for: |
16 | (1) failure to pursue or create the general public | <-- |
17 | benefit purpose of the benefit corporation or any specific |
18 | public benefit purpose set forth in its articles; or |
19 | (2) violation of a any obligation, duty or standard of | <-- |
20 | conduct under this chapter. |
21 | "Benefit officer." The officer of a benefit corporation | <-- |
22 | individual, if any, designated as the benefit officer of a | <-- |
23 | benefit corporation as provided in section 3324 (relating to |
24 | benefit officer). |
25 | "General public benefit." A material positive impact on |
26 | society and the environment by the operations of a benefit | <-- |
27 | corporation taken as a whole, as measured by, taken as a whole, | <-- |
28 | assessed against a third-party standard, through activities that | <-- |
29 | promote some combination of specific public benefits from the | <-- |
30 | business and operations of a benefit corporation. |
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1 | "Independent." When a person has no material relationship |
2 | with a benefit corporation or any of its subsidiaries, other |
3 | than the relationship of serving as the benefit director or |
4 | benefit officer, either directly or as a shareholder, partner, | <-- |
5 | member or other owner or a director, officer or other manager of |
6 | an association that has a material relationship with the benefit |
7 | corporation or any of its subsidiaries. A material relationship |
8 | between an individual and a benefit corporation or any of its |
9 | subsidiaries will be conclusively presumed to exist if: |
10 | (1) the person is, or has been within the last three |
11 | years, an employee of the benefit corporation or any of its |
12 | subsidiaries, other than as a benefit officer; |
13 | (2) an immediate family member of the person is, or has |
14 | been within the last three years, an executive officer, other |
15 | than a benefit officer, of the benefit corporation or any of |
16 | its subsidiaries; or |
17 | (3) the person, or an association of which the person is |
18 | a director, officer or other manager or in which the person |
19 | owns beneficially or of record 5% or more of the outstanding |
20 | equity interests, owns beneficially or of record 5% or more |
21 | of the outstanding shares of the benefit corporation. The |
22 | percentage of ownership in an association shall be calculated |
23 | as if all outstanding rights to acquire equity interests in |
24 | the association had been exercised. |
25 | "Minimum status vote." When in addition to any other | <-- |
26 | approval or vote required by this subpart or a bylaw adopted by |
27 | the shareholders: |
28 | (1) The holders of shares of every class or series shall |
29 | be entitled to vote on the corporate action regardless of any |
30 | limitation stated in the articles of incorporation or bylaws |
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1 | on the voting rights of any class or series. |
2 | (2) The corporate action must be approved by vote of the |
3 | shareholders of each class or series entitled to cast at |
4 | least two-thirds of the votes that all shareholders of the |
5 | class or series are entitled to cast on the corporate action. |
6 | "Minimum status vote." | <-- |
7 | (1) In the case of a business corporation, in addition |
8 | to any other required approval or vote, the satisfaction of |
9 | the following conditions: |
10 | (i) The shareholders of every class or series must |
11 | be entitled, as a class, to vote on the corporate action |
12 | regardless of a limitation stated in the articles of |
13 | incorporation or bylaws on the voting rights of any class |
14 | or series. |
15 | (ii) The corporate action must be approved by a vote |
16 | of the shareholders of each class or series entitled to |
17 | cast at least two-thirds of the votes that all |
18 | shareholders of the class or series are entitled to cast |
19 | on the action. |
20 | (2) In the case of a domestic association other than a |
21 | business corporation, in addition to any other required |
22 | approval, vote or consent, the satisfaction of the following |
23 | conditions: |
24 | (i) The holders of every class or series of equity |
25 | interest in the association that are entitled to receive |
26 | a distribution of any kind from the association must be |
27 | entitled as a class to vote on or consent to the action |
28 | regardless of any otherwise applicable limitation on the |
29 | voting or consent rights of any class or series. |
30 | (ii) The action must be approved by vote or consent |
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1 | of the holders described in subparagraph (i) entitled to |
2 | cast at least two-thirds of the votes or consents that |
3 | all of those holders are entitled to cast on the action. |
4 | "Specific public benefit." Includes the following: | <-- |
5 | (1) providing low-income or underserved individuals or |
6 | communities with beneficial products or services; |
7 | (2) promoting economic opportunity for individuals or |
8 | communities beyond the creation of jobs in the normal course |
9 | of business; |
10 | (3) preserving the environment; |
11 | (4) improving human health; |
12 | (5) promoting the arts, sciences or advancement of |
13 | knowledge; |
14 | (6) promoting economic development through support of | <-- |
15 | initiatives that increase access to capital for emerging and |
16 | growing technology enterprises, facilitate the transfer and |
17 | commercial adoption of new technologies, provide technical |
18 | and business support to emerging and growing technology |
19 | enterprises or form support partnerships that support those |
20 | objectives; |
21 | (6) (7) increasing the flow of capital to entities with | <-- |
22 | a public benefit purpose; and |
23 | (7) (8) the accomplishment of any other particular | <-- |
24 | benefit for society or the environment. |
25 | "Subsidiary." An association in which a person owns |
26 | beneficially or of record 50% or more of the outstanding equity |
27 | interests. The percentage of ownership in an association shall |
28 | be calculated as if all outstanding rights to acquire equity |
29 | interests in the association had been exercised. |
30 | "Third-party standard." A recognized standard for defining, | <-- |
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1 | reporting and assessing corporate social and environmental |
2 | performance that is: |
3 | (1) developed by a person that is independent of the |
4 | benefit corporation; and |
5 | (2) transparent because the following information about |
6 | the standard is publicly available: |
7 | (i) the factors considered when measuring the |
8 | performance of a business; |
9 | (ii) the relative weightings of those factors; and |
10 | (iii) the identity of the persons who developed and |
11 | control changes to the standard and the process by which |
12 | those changes are made. |
13 | "Third-party standard." A standard for defining, reporting | <-- |
14 | and assessing overall corporate social and environmental |
15 | performance which is: |
16 | (1) Comprehensive in that it assesses the effect of the |
17 | business and its operations upon the interests listed in |
18 | section 3321(a)(1)(ii), (iii), (iv) and (v) (relating to |
19 | standard of conduct for directors). |
20 | (2) Developed by an organization that is independent of |
21 | the benefit corporation and satisfies the following |
22 | requirements: |
23 | (i) Not more than one-third of the members of the |
24 | governing body of the organization are representatives of |
25 | any of the following: |
26 | (A) An association of businesses operating in a |
27 | specific industry the performance of whose members is |
28 | measured by the standard. |
29 | (B) Businesses from a specific industry or an |
30 | association of businesses in that industry. |
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1 | (C) Businesses whose performance is assessed |
2 | against the standard. |
3 | (ii) The organization is not materially financed by |
4 | an association or business described in subparagraph (i). |
5 | (3) Credible because the standard is developed by a |
6 | person that both: |
7 | (i) Has access to necessary expertise to assess |
8 | overall corporate social and environmental performance. |
9 | (ii) Uses a balanced multistakeholder approach, |
10 | including a public comment period of at least 30 days to |
11 | develop the standard. |
12 | (4) Transparent because the following information is |
13 | publicly available: |
14 | (i) About the standard: |
15 | (A) The criteria considered when measuring the |
16 | overall social and environmental performance of a |
17 | business. |
18 | (B) The relative weightings, if any, of those |
19 | criteria. |
20 | (ii) About the development and revision of the |
21 | standard: |
22 | (A) The identity of the directors, officers, |
23 | material owners and the governing body of the |
24 | organization that developed and controls revisions to |
25 | the standard. |
26 | (B) The process by which revisions to the |
27 | standard and changes to the membership of the |
28 | governing body are made. |
29 | (C) An accounting of the sources of financial |
30 | support for the organization, with sufficient detail |
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1 | to disclose any relationships that could reasonably |
2 | be considered to present a potential conflict of |
3 | interest. |
4 | § 3303. Formation of benefit corporations. |
5 | A benefit corporation shall be formed in accordance with |
6 | Article B (relating to domestic business corporations generally) |
7 | except that its articles shall also state that it is a benefit |
8 | corporation. |
9 | § 3304. Election of an existing business corporation to become | <-- |
10 | a benefit corporation benefit corporation status. | <-- |
11 | (a) Amendment.--A An existing business corporation may | <-- |
12 | become a benefit corporation by amending its articles so that |
13 | they contain, in addition to the requirements of section 1911(b) | <-- |
14 | (relating to amendment of articles authorized) 1306(a) (relating | <-- |
15 | to articles of incorporation), a statement that the corporation |
16 | is a benefit corporation. The amendment shall not be effective |
17 | unless it is adopted by at least the minimum status vote. |
18 | (b) Fundamental transactions.--If a corporation an | <-- |
19 | association that is not a benefit corporation is a party to a |
20 | merger, consolidation or division or is the exchanging |
21 | corporation association in a share exchange, and the surviving, | <-- |
22 | new or any resulting corporation association in the merger, | <-- |
23 | consolidation, division or share exchange is to be a benefit |
24 | corporation, then the plan of merger, consolidation, division or |
25 | share exchange shall not be effective unless it is adopted by |
26 | the corporation by at least the minimum status vote. |
27 | § 3305. Termination of benefit corporation status. |
28 | (a) Amendment.--A benefit corporation may terminate its |
29 | status as a benefit corporation and cease to be subject to this |
30 | chapter by amending its articles to delete the provision |
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1 | required under section 3304 (relating to election of an existing |
2 | business corporation to become a benefit corporation) to be |
3 | stated in the articles of a benefit corporation. The amendment |
4 | shall not be effective unless it is adopted by at least the |
5 | minimum status vote. |
6 | (b) Fundamental transactions.--If a plan would have the |
7 | effect of terminating the status of a business corporation as a |
8 | benefit corporation, the plan shall not be effective unless it |
9 | is adopted by at least the minimum status vote. Any sale, lease, | <-- |
10 | exchange or other disposition of all or substantially all of the |
11 | assets of a benefit corporation, unless the transaction is in |
12 | the usual and regular course of business, shall not be effective |
13 | unless the transaction is approved by at least the minimum |
14 | status vote. |
15 | (c) Involuntary termination.--The status of a corporation as | <-- |
16 | a benefit corporation may be terminated involuntarily under |
17 | section 3331(e) (relating to annual benefit report) if it fails |
18 | to file an annual benefit report. |
19 | SUBCHAPTER B |
20 | CORPORATE PURPOSES |
21 | Sec. |
22 | 3311. Corporate purposes. |
23 | § 3311. Corporate purposes. |
24 | (a) General public benefit purpose.--A benefit corporation |
25 | shall have the a purpose of creating general public benefit. | <-- |
26 | This purpose is in addition to, and may be a limitation on, its | <-- |
27 | purpose under section 1301 (relating to purposes) and any | <-- |
28 | specific purpose set forth in its articles under subsection (b). |
29 | (b) Optional specific public benefit purpose.--The articles |
30 | of a benefit corporation may identify one or more specific |
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1 | public benefits that it is the purpose of the benefit |
2 | corporation to create in addition to its purposes under section |
3 | 1301 and subsection (a). The identification of a specific public |
4 | benefit does not limit the obligation of a benefit corporation |
5 | to create general public benefit. |
6 | (c) Effect of purposes.--The creation of general and |
7 | specific public benefit as provided in subsections (a) and (b) |
8 | is in the best interests of the benefit corporation. |
9 | (d) Amendment.--A benefit corporation may amend its articles |
10 | to add, amend or delete the identification of a specific public |
11 | benefit that it is the purpose of the benefit corporation to |
12 | create. The amendment shall not be effective unless it is |
13 | adopted by at least the minimum status vote. |
14 | (e) Professional corporations.--A professional corporation | <-- |
15 | that is a benefit corporation does not violate section 2922(a) |
16 | (relating to stated purposes) by having the purpose to create |
17 | general public benefit or a specific public benefit. |
18 | SUBCHAPTER C |
19 | ACCOUNTABILITY |
20 | Sec. |
21 | 3321. Standard of conduct for directors. |
22 | 3322. Benefit director. |
23 | 3323. Standard of conduct for officers. |
24 | 3324. Benefit officer. |
25 | 3325. Right of action. |
26 | § 3321. Standard of conduct for directors. |
27 | (a) Required considerations Consideration of interests.-- | <-- |
28 | Without regard to whether the benefit corporation is subject to |
29 | section 1715 (relating to exercise of powers generally) or 1716 |
30 | (relating to alternative standard), in discharging the duties of |
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1 | their respective positions, the board of directors, committees |
2 | of the board and individual directors of a benefit corporation, |
3 | in considering the best interest of the benefit corporation: |
4 | (1) shall consider the effects of any action upon: |
5 | (i) the shareholders of the benefit corporation; |
6 | (ii) the employees and work force of the benefit |
7 | corporation and its subsidiaries and suppliers; |
8 | (iii) the interests of customers as beneficiaries of |
9 | the general or specific public benefit purposes of the |
10 | benefit corporation; |
11 | (iv) community and societal considerations, |
12 | including those of any community in which offices or |
13 | facilities of the benefit corporation or its subsidiaries |
14 | or suppliers are located; |
15 | (v) the local and global environment; and | <-- |
16 | (vi) the short-term and long-term interests of the |
17 | benefit corporation, including benefits that may accrue |
18 | to the benefit corporation from its long-term plans and |
19 | the possibility that these interests may be best served |
20 | by the continued independence of the benefit corporation. | <-- |
21 | corporation; and | <-- |
22 | (vii) the ability of the benefit corporation to |
23 | accomplish its general public benefit purpose and any |
24 | specific public benefit purpose; and |
25 | (2) may consider: |
26 | (i) the resources, intent and conduct, whether past, | <-- |
27 | stated or potential, of any person seeking to acquire |
28 | control of the corporation matters listed in section | <-- |
29 | 1715(a); and |
30 | (ii) any other pertinent factors or the interests of |
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1 | any other group that they deem appropriate; and but | <-- |
2 | (3) shall not be required to give priority to the |
3 | interests of any person or group referred to in paragraphs | <-- |
4 | (1) and paragraph (1) or (2) over the interests of any other | <-- |
5 | person or group unless the benefit corporation has stated in | <-- |
6 | its articles its intention to give priority to certain | <-- |
7 | interests related to its accomplishment of its general public | <-- |
8 | benefit purpose or of a specific public benefit purpose |
9 | identified in its articles. |
10 | (b) Coordination with other provisions of law.--The |
11 | consideration of interests and factors in the manner required |
12 | under subsection (a): |
13 | (1) shall not constitute a violation of section 1712 |
14 | (relating to standard of care and justifiable reliance); and |
15 | (2) is in addition to the ability of directors to |
16 | consider interests and factors as provided in section 1715 or |
17 | 1716. |
18 | (c) Personal liability of directors.--A director shall not | <-- |
19 | (c) Exoneration from personal liability.-- | <-- |
20 | (1) A director shall not be personally liable, as such, |
21 | for monetary damages for any action taken as a director if |
22 | the director performed the duties of his or her office in |
23 | compliance with section 1712 and this section. |
24 | (2) A director shall not be personally liable for | <-- |
25 | monetary damages for failure of the benefit corporation to |
26 | create general public benefit or a specific public benefit. |
27 | (d) Limitation on standing.--A director does not have a |
28 | duty to a person that is a beneficiary of the general public |
29 | benefit purpose or a specific public benefit purpose of a |
30 | benefit corporation arising from the status of the person as a |
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1 | beneficiary. |
2 | § 3322. Benefit director. |
3 | (a) General rule.--The board of directors of a benefit |
4 | corporation shall include one a director who shall be designated | <-- |
5 | as the benefit director and shall have, in addition to all of |
6 | the powers, duties, rights and immunities of the other directors |
7 | of the benefit corporation, the powers, duties, rights and |
8 | immunities provided in this subchapter. |
9 | (b) Election, removal and qualifications.--The benefit |
10 | director shall be elected, and may be removed, in the manner |
11 | provided under Subchapter C of Chapter 17 (relating to directors |
12 | and officers), and shall be an individual who is independent. |
13 | The benefit director may serve as the benefit officer at the |
14 | same time as serving as the benefit director. The articles or |
15 | bylaws of a benefit corporation may prescribe additional |
16 | qualifications of the benefit director not inconsistent with |
17 | this subsection. |
18 | (c) Annual compliance statement.--The benefit director shall |
19 | prepare, and the benefit corporation shall include in the annual |
20 | benefit report to shareholders required under section 3331 |
21 | (relating to annual benefit report), a statement whether, in the |
22 | opinion of the benefit director, the benefit corporation acted |
23 | in accordance with its general and any specific public benefit |
24 | purpose in all material respects during the period covered by |
25 | the report and whether the directors and officers complied with |
26 | sections 3321(a) (relating to standard of conduct for directors) |
27 | and 3323(a) (relating to standard of conduct for officers), |
28 | respectively. If, in the opinion of the benefit director, the |
29 | benefit corporation or its directors or officers failed so to |
30 | act, then the statement of the benefit director shall include a |
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1 | description of the ways in which the benefit corporation or its |
2 | directors or officers failed so to act. |
3 | (d) Status of actions.--The acts of an individual in the |
4 | capacity of a benefit director shall constitute for all purposes |
5 | acts of that individual in the capacity of a director of the |
6 | benefit corporation. |
7 | (e) Alternative governance arrangements.--If the bylaws of a | <-- |
8 | benefit corporation provide that the powers and duties conferred |
9 | or imposed upon the board of directors shall be exercised or |
10 | performed by a person or persons other than the directors |
11 | pursuant to section 1721(a) (relating to board of directors) or |
12 | the bylaws of a statutory close corporation that is a benefit |
13 | corporation provide that the business and affairs of the |
14 | corporation shall be managed by or under the direction of the |
15 | shareholders, then the bylaws of the benefit corporation must |
16 | provide that the person or persons or shareholders who perform |
17 | the duties of a board of directors shall include a person with |
18 | the powers, duties, rights and immunities of a benefit director. |
19 | (e) Alternative governance arrangements.-- | <-- |
20 | (1) The bylaws of a benefit corporation must provide |
21 | that the persons or shareholders who perform the duties of |
22 | the board of directors include a person with the powers, |
23 | duties, rights and immunities of a benefit director if any of |
24 | the following apply: |
25 | (i) The bylaws of a benefit corporation provide that |
26 | the powers and duties conferred or imposed upon the board |
27 | of directors shall be exercised or performed by a person |
28 | other than the directors under section 1721(a) (relating |
29 | to board of directors). |
30 | (ii) The bylaws of a statutory close corporation |
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1 | that is a benefit corporation provide that the business |
2 | and affairs of the corporation shall be managed by or |
3 | under the direction of the shareholders. |
4 | (2) A person that exercises one or more of the powers, |
5 | duties or rights of a benefit director under this subsection: |
6 | (i) does not need to be independent of the benefit |
7 | corporation; |
8 | (ii) shall have the immunities of a benefit |
9 | director; |
10 | (iii) may share the powers, duties and rights of a |
11 | benefit director with one or more other persons; and |
12 | (iv) shall not be subject to the procedures for |
13 | election or removal of directors in Chapter 17 Subchapter |
14 | C (relating to directors and officers) unless: |
15 | (A) the person is also a director of the benefit |
16 | corporation; or |
17 | (B) the bylaws make those procedures applicable. |
18 | (f) Personal liability of directors Exoneration from | <-- |
19 | personal liability.--Regardless of whether the bylaws of a |
20 | benefit corporation include a provision eliminating or limiting |
21 | the personal liability of directors authorized under section |
22 | 1713 (relating to personal liability of directors), a benefit |
23 | director shall not be personally liable for any act or omission |
24 | in the capacity of a benefit director unless the act or omission |
25 | constitutes self-dealing, willful misconduct or a knowing |
26 | violation of law. |
27 | § 3323. Standard of conduct for officers. |
28 | (a) General rule.--Each officer of a benefit corporation |
29 | shall consider the interests and factors described in section |
30 | 3321(a) (relating to standard of conduct for directors) in the |
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1 | manner provided in that subsection when: |
2 | (1) the officer has discretion to act with respect to a |
3 | matter; and |
4 | (2) it reasonably appears to the officer that the matter |
5 | may have a material effect on: | <-- |
6 | (i) the creation of general or specific public |
7 | benefit by the benefit corporation; or |
8 | (ii) any of the interests or factors referred to in |
9 | section 3321(a). on the creation by the benefit | <-- |
10 | corporation of general public benefit or a specific |
11 | public benefit identified in the articles of the benefit |
12 | corporation. |
13 | (b) Coordination with other provisions of law.--The |
14 | consideration of interests and factors in the manner described |
15 | in subsection (a) shall not constitute a violation of section |
16 | 1712(c) (relating to standard of care and justifiable reliance). |
17 | (c) Personal liability of officers.--An officer shall not be | <-- |
18 | (c) Exoneration from personal liability.-- | <-- |
19 | (1) An officer shall not be personally liable, as such, |
20 | for monetary damages for any action taken as an officer if |
21 | the officer performed the duties of the position in |
22 | compliance with section 1712(c) and this section. |
23 | (2) An officer shall not be personally liable for | <-- |
24 | monetary damages for failure of the benefit corporation to |
25 | pursue or create general public benefit or a specific public |
26 | benefit. |
27 | (d) Limitation on standing.--An officer does not have a duty |
28 | to a person that is a beneficiary of the general public benefit |
29 | purpose or a specific public benefit purpose of a benefit |
30 | corporation arising from the status of the person as a |
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1 | beneficiary. |
2 | § 3324. Benefit officer. |
3 | A benefit corporation may have an officer designated as the |
4 | benefits officer who shall have such authority and shall perform |
5 | such duties in the management of the benefit corporation |
6 | relating to the purpose of the corporation to create general or |
7 | specific public benefit as may be provided by or pursuant to the |
8 | bylaws or, in the absence of controlling provisions in the |
9 | bylaws, as may be determined by or pursuant to resolutions or |
10 | orders of the board of directors. If a benefit corporation has a |
11 | benefit officer, the duties of the benefit officer shall include |
12 | preparing the benefit report required under section 3331 |
13 | (relating to annual benefit report). |
14 | § 3325. Right of action. |
15 | (a) General rule.--The duties of directors and officers | <-- |
16 | under this chapter, and the general and any specific public |
17 | benefit purpose of a benefit corporation, may be enforced only |
18 | in a benefit enforcement proceeding. No person may bring an |
19 | action or assert a claim against a benefit corporation or its |
20 | directors or officers with respect to the duties of directors |
21 | and officers under this chapter, and the general and any |
22 | specific public benefit purpose of the benefit corporation, |
23 | except in a benefit enforcement proceeding. |
24 | (a) Limitations.-- | <-- |
25 | (1) Except in a benefit enforcement proceeding, no |
26 | person may bring an action or assert a claim against a |
27 | benefit corporation or its directors or officers with respect |
28 | to: |
29 | (i) failure to pursue or create general public |
30 | benefit or a specific public benefit set forth in its |
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1 | articles; or |
2 | (ii) violation of a duty or standard of conduct |
3 | under this chapter. |
4 | (2) A benefit corporation shall not be liable for |
5 | monetary damages under this chapter for any failure of the |
6 | benefit corporation to pursue or create general public |
7 | benefit or a specific public benefit. |
8 | (b) Parties with standing.--A benefit enforcement proceeding |
9 | may be commenced or maintained only: |
10 | (1) directly by the benefit corporation; or |
11 | (2) derivatively by: |
12 | (i) a shareholder; |
13 | (ii) a director; |
14 | (iii) a person or group of persons that owns |
15 | beneficially or of record 10% 5% or more of the equity | <-- |
16 | interests in an association of which the benefit |
17 | corporation is a subsidiary; or |
18 | (iv) such other persons as may be specified in the |
19 | articles or bylaws of the benefit corporation. |
20 | (c) Cross reference.--The provisions of Subchapter F of |
21 | Chapter 17 (relating to derivative actions) shall apply to |
22 | derivative actions under this section. |
23 | SUBCHAPTER D |
24 | TRANSPARENCY |
25 | Sec. |
26 | 3331. Annual benefit report. |
27 | § 3331. Annual benefit report. |
28 | (a) General rule Contents.--A benefit corporation must | <-- |
29 | deliver to each shareholder an annual benefit report including: |
30 | (1) a A narrative description of: | <-- |
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1 | (i) the ways in which the benefit corporation |
2 | pursued general public benefit during the year and the |
3 | extent to which general public benefit was created; |
4 | (ii) the ways in which the benefit corporation |
5 | pursued any specific public benefit that the articles |
6 | state is the purpose of the benefit corporation to create |
7 | and the extent to which that specific public benefit was |
8 | created; and | <-- |
9 | (iii) any circumstances that have hindered the |
10 | creation by the benefit corporation of general or |
11 | specific public benefit.; and | <-- |
12 | (iv) the process and rationale for selecting or |
13 | changing the third-party standard used to prepare the |
14 | benefit report. |
15 | (2) an An assessment of the overall social and | <-- |
16 | environmental performance of the benefit corporation, | <-- |
17 | prepared in accordance with against a third-party standard | <-- |
18 | applied consistently with any application of that standard in |
19 | prior benefit reports or accompanied by an explanation of the |
20 | reasons for any inconsistent application;. The assessment | <-- |
21 | does not need to be audited or certified by a third-party |
22 | standards provider. |
23 | (3) the The name of the benefit director and the benefit | <-- |
24 | officer, if any, and the address to which correspondence to |
25 | each of them may be directed;. | <-- |
26 | (4) the The compensation paid by the benefit corporation | <-- |
27 | during the year to each director in that capacity;. | <-- |
28 | (5) the The name of each person that owns 5% or more of | <-- |
29 | the outstanding shares of the benefit corporation either |
30 | beneficially, to the extent known to the benefit corporation |
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1 | without independent investigation, or of record; and. | <-- |
2 | (6) the The statement of the benefit director described | <-- |
3 | in section 3322(c) (relating to benefit director). |
4 | (7) A statement of any connection between the | <-- |
5 | organization that established the third-party standard, or |
6 | its directors, officers or any holder of 5% or more of the |
7 | governance interests in the organization, and the benefit |
8 | corporation or its directors, officers or any holder of 5% or |
9 | more of the outstanding shares of the benefit corporation, |
10 | including any financial or governance relationship which |
11 | might materially affect the credibility of the use of the |
12 | third-party standard. |
13 | (8) If the benefit corporation has dispensed with, or |
14 | restricted the discretion or powers of, the board of |
15 | directors, a description of: |
16 | (i) the persons that exercise the powers, duties and |
17 | rights and who have the immunities of the board of |
18 | directors; and |
19 | (ii) the benefit director, as required by section |
20 | 3322(e). |
21 | (b) Timing of report.--The benefit report must be sent | <-- |
22 | annually to each shareholder A benefit corporation shall | <-- |
23 | annually send a benefit report to each shareholder either: |
24 | (1) within 120 days following the end of the fiscal year |
25 | of the benefit corporation or at the same; or | <-- |
26 | (2) at the same time that the benefit corporation |
27 | delivers any other annual report to its shareholders. |
28 | (c) Internet website posting.--A benefit corporation must |
29 | post its most recent benefit report all of its benefit reports | <-- |
30 | on the public portion of its Internet website, if any, except |
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1 | that the compensation paid to directors and any financial or |
2 | proprietary information included in the benefit report may be |
3 | omitted from the benefit report as posted. |
4 | (d) Availability of copies.--If a benefit corporation does | <-- |
5 | not have an Internet website, the benefit corporation shall |
6 | provide a copy of its most recent benefit report, without |
7 | charge, to any person that requests a copy, but the compensation |
8 | paid to directors and financial or proprietary information |
9 | included in the benefit report may be omitted from the copy of |
10 | the benefit report provided. |
11 | (d) (e) Filing of report.--Concurrently with the delivery of | <-- |
12 | the benefit report to shareholders pursuant to subsection (b), |
13 | the benefit corporation must deliver a copy of the benefit |
14 | report to the Department of State department for filing, except | <-- |
15 | that the compensation paid to directors and any financial or |
16 | proprietary information included in the benefit report may be |
17 | omitted from the benefit report as filed under this section. The |
18 | department shall charge a fee of $70 for filing a benefit |
19 | report. |
20 | (e) Failure to file report.--If a benefit corporation has | <-- |
21 | not delivered a benefit report to the department for a period of |
22 | two years, the department may prepare and file a statement that |
23 | the corporation has forfeited its status as a benefit |
24 | corporation and is no longer subject to this chapter. If the |
25 | corporation subsequently delivers a benefit report to the |
26 | department for filing, the status of the corporation as a |
27 | benefit corporation shall be automatically reinstated upon the |
28 | filing of the benefit report by the department, and the |
29 | corporation shall again be subject to this chapter. |
30 | Section 2. This act shall take effect in 60 90 days. | <-- |
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