LRB-3657/1
ARG:kjf
2017 - 2018 LEGISLATURE
June 15, 2017 - Introduced by Senators Testin, Johnson, Darling, Ringhand,
Wirch and Harsdorf, cosponsored by Representatives Skowronski,
Hesselbein, Genrich, Horlacher, Ohnstad, Crowley, Subeck, C. Taylor,
Kulp, Quinn, Sanfelippo, Spreitzer, Hintz and Kooyenga. Referred to
Committee on Economic Development, Commerce and Local Government.
SB298,1,2 1An Act to create chapter 204 of the statutes; relating to: creation of a category
2of business corporation identified as a benefit corporation.
Analysis by the Legislative Reference Bureau
This bill creates a category of business corporation identified as a benefit
corporation. A benefit corporation may also fall within other categories of business
corporations, such as service corporations or statutory close corporations.
Under the bill, a benefit corporation may be created by including in the articles
of incorporation at the time of formation, or by later amending the articles of
incorporation to include, a statement that the corporation is a benefit corporation.
A business corporation's status as a benefit corporation may be terminated by
amending the articles of incorporation to delete this statement.
A benefit corporation must have a purpose of creating general public benefit
and the benefit corporation may also specify in its articles of incorporation additional
specific public benefit purposes. A “general public benefit" is defined as a material
positive impact on society and the environment by the operations of a benefit
corporation taken as a whole, through activities that promote some combination of
specific public benefits. Examples of “specific public benefit" include all of the
following: 1) providing low-income or underserved individuals or communities with
beneficial products or services; 2) promoting economic opportunity for individuals or
communities beyond the creation of jobs in the normal course of business; 3)
preserving the environment; 4) improving human health; 5) promoting the arts,
sciences, or advancement of knowledge; 6) increasing the flow of capital to entities
with a public benefit purpose; and 7) the accomplishment of any other particular
benefit for society or the environment.

The board of directors of a benefit corporation must include one director
designated as the “benefit director." Notwithstanding provisions of the business
corporation law, the board of directors, committees of the board, and individual
directors of a benefit corporation, in considering the best interests of the benefit
corporation, must consider the effects of any action or inaction on all of the following:
1) the shareholders of the benefit corporation; 2) the employees and workforce of the
benefit corporation and its subsidiaries and suppliers; 3) the interests of customers
as beneficiaries of the general public benefit or specific public benefit purposes of the
benefit corporation; 4) community and societal factors, including those of any
community in which offices or facilities of the benefit corporation or its subsidiaries
or suppliers are located; 5) the local and global environment; 6) the short-term and
long-term interests of the benefit corporation, including benefits that may accrue to
the benefit corporation from its long-term plans and the possibility that these
interests may be best served by the continued independence of the benefit
corporation; and 7) the ability of the benefit corporation to accomplish its general
public benefit purpose and any specific public benefit purpose. In addition, the
board, committees, and individual directors may consider the resources, intent, and
conduct of any person seeking to acquire control of the benefit corporation and any
other pertinent factors or the interests of any other group.
A benefit corporation may also designate a “benefit officer," who has the powers
and duties relating to the benefit corporation's purpose of creating general public
benefit or specific public benefit. Each officer of a benefit corporation must consider
the same interests and factors applicable for directors, identified as items 1 to 7
immediately above, when the officer has discretion to act with respect to a matter
that may have a material effect on the creation of general or specific public benefit
by the benefit corporation.
A benefit corporation must annually provide its shareholders with a statement
as to the benefit corporation's promotion of general public benefit or any specific
public benefit identified in its articles of incorporation, which statement includes
specified information.
The bill also includes certain limitations on imposing personal liability on
directors and officers of benefit corporations.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB298,1 1Section 1. Chapter 204 of the statutes is created to read:
SB298,2,22 CHAPTER 204
SB298,2,33 BENEFIT Corporations
SB298,2,44 SUBCHAPTER I
SB298,2,55 GENERAL PROVISIONS
SB298,3,2
1204.101 Application and effect of chapter. (1) General rule. This chapter
2shall be applicable to all benefit corporations.
SB298,3,7 3(2) Application of business corporation law generally. The existence of a
4provision of this chapter shall not of itself create an implication that a contrary or
5different rule of law is applicable to a business corporation that is not a benefit
6corporation. This chapter shall not affect any statute or rule that is applicable to a
7business corporation that is not a benefit corporation.
SB298,3,12 8(3) Laws applicable to benefit corporations. Except as otherwise provided in
9this chapter, ch. 180 shall be generally applicable to all benefit corporations. The
10specific provisions of this chapter shall control over the general provisions of ch. 180.
11A benefit corporation may be simultaneously subject to this chapter and provisions
12of other chapters.
SB298,3,15 13(4) Organic records. A provision of the articles or bylaws of a benefit
14corporation may not relax, be inconsistent with, or supersede a provision of this
15chapter.
SB298,3,17 16204.102 Definitions. Unless the context clearly indicates otherwise, in this
17chapter:
SB298,3,20 18(1) “Benefit corporation" means a business corporation that has elected to
19become subject to this chapter and whose status as a benefit corporation has not been
20terminated under s. 204.105.
SB298,3,22 21(2) “Benefit director" means the person designated as the benefit director of a
22benefit corporation as provided in s. 204.302.
SB298,3,24 23(3) “Benefit officer" means the officer of a benefit corporation, if any, designated
24as the benefit officer as provided in s. 204.304.
SB298,3,25 25(4) “Entity" has the meaning given in s. 180.0103 (8).
SB298,4,3
1(5) “General public benefit" means a material positive impact on society and
2the environment by the operations of a benefit corporation taken as a whole, through
3activities that promote some combination of specific public benefits.
SB298,4,4 4(6) “Service corporation" has the meaning given in s. 180.1901 (2).
SB298,4,5 5(7) “Specific public benefit" includes all of the following:
SB298,4,76 (a) Providing low-income or underserved individuals or communities with
7beneficial products or services.
SB298,4,98 (b) Promoting economic opportunity for individuals or communities beyond the
9creation of jobs in the normal course of business.
SB298,4,1010 (c) Preserving the environment.
SB298,4,1111 (d) Improving human health.
SB298,4,1212 (e) Promoting the arts, sciences, or advancement of knowledge.
SB298,4,1313 (f) Increasing the flow of capital to entities with a public benefit purpose.
SB298,4,1514 (g) The accomplishment of any other particular benefit for society or the
15environment.
SB298,4,18 16204.103 Formation of benefit corporations. A benefit corporation shall be
17formed in accordance with ch. 180, except that its articles shall also state that it is
18a benefit corporation.
SB298,4,23 19204.104 Election of an existing business corporation to become a
20benefit corporation.
(1) Amendment. An existing business corporation may
21become a benefit corporation under this chapter by amending its articles so that they
22contain, in addition to the requirements of s. 180.0202, a statement that the
23corporation is a benefit corporation.
SB298,5,5 24(2) Fundamental transactions. If a corporation that is not a benefit
25corporation is a party to a merger, consolidation, or division or is the exchanging

1corporation in a share exchange, and the surviving, new, or any resulting corporation
2in the merger, consolidation, division, or share exchange is to be a benefit
3corporation, then the plan of merger, consolidation, division, or share exchange shall
4not be effective unless the articles of the surviving, new, or resulting corporation
5contain a statement that the corporation is a benefit corporation.
SB298,5,9 6204.105 Termination of benefit corporation status. A benefit corporation
7may terminate its status as such and cease to be subject to this chapter by amending
8its articles to delete the provision required by ss. 204.103 and 204.104 to be stated
9in the articles of a benefit corporation.
SB298,5,1010 SUBCHAPTER II
SB298,5,1111 corporate Purposes
SB298,5,15 12204.201 Corporate purposes. (1) General public benefit purpose. A
13benefit corporation shall have a purpose of creating general public benefit. This
14purpose is in addition to its purpose under s. 180.0301 and any specific purpose set
15forth in its articles under sub. (2).
SB298,5,20 16(2) Optional specific public benefit purpose. The articles of a benefit
17corporation may identify one or more specific public benefits that it is the purpose
18of the benefit corporation to create in addition to its purposes under s. 180.0301 and
19sub. (1). The identification of a specific public benefit under this subsection does not
20limit the obligation of a benefit corporation to create general public benefit.
SB298,5,23 21(3) Effect of purposes. The creation of general public benefit and specific
22public benefit as provided in subs. (1) and (2) shall be considered to be in the best
23interests of the benefit corporation.
SB298,6,3
1(4) Amendment. A benefit corporation may amend its articles to add, amend,
2or delete the identification of a specific public benefit that it is the purpose of the
3benefit corporation to create.
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