Newly appointed Commissioner of California Corporations, Jan Owen, discusses the new “For Benefit” laws and provides a status update of other pertinent issues affecting public and private corporations. Sponsored by the Northern California chapter of the National Association of Corporate Directors. Event details at bottom.
Unlike typical for-profits, “for benefit” enterprises have social or environmental outcomes as their ultimate goal; and unlike typical nonprofits, they derive their income from the sale of goods and services.
On October 9th, 2011, Governor Jerry Brown signed into law Senate Bill 201, establishing flexible purpose corporations, and Assembly Bill 361, establishing benefit corporations. These laws established two new types of corporate entities in California, allowing for the pursuit of both profit and social welfare objectives. Flexible purpose corporations and benefit corporations are for profit corporations that blend non-profit ideals into their business models.
A flexible purpose corporation must specify at least one “special purpose” in its charter documents, such as environmental considerations or social benefits. The new law on flexible purpose corporations establishes a corporate model that shields directors from liability for mission-driven decision-making and permits expanded corporate constituencies.
A benefit corporation must have as its purpose to create a material positive impact on society and the environment, as assessed against a third-party standard. Instead of the duty to act in a manner that the director believes to be in the best interests of the shareholder, a director of a benefit corporation has a duty towards the benefit corporation as a whole, and must take into account seven interests, only one of which is shareholders.
Thursday February 16, 2012 from 11:30 AM to 2:00 PM PST, 621 Capital Mall, 18th Floor, Sacramento, CA 95814. Cost: $50 Member $65 Nonmember. Register.