AB742: Bill Text

AB742,8,6 SUBCHAPTER II

AB742,8,7 corporate PurposeS

AB742,8,11 202.201 Corporate purposes. (1) General public benefit purpose. A benefit corporation shall have a purpose of creating general public benefit. This purpose is in addition to its purpose under s. 180.0301 and any specific purpose set forth in its articles under sub. (2).

AB742,8,16 (2) Optional specific public benefit purpose. The articles of a benefit corporation may identify one or more specific public benefits that it is the purpose of the benefit corporation to create in addition to its purposes under s. 180.0301 and sub. (1). The identification of a specific public benefit under this subsection does not limit the obligation of a benefit corporation to create general public benefit.

AB742,8,19 (3) Effect of purposes. The creation of general public benefit and specific public benefit as provided in subs. (1) and (2) shall be considered to be in the best interests of the benefit corporation.

AB742,8,23 (4) Amendment. A benefit corporation may amend its articles to add, amend, or delete the identification of a specific public benefit that it is the purpose of the benefit corporation to create. The amendment shall not be effective unless it is adopted by at least the minimum status vote.

AB742,9,3 (5) Service corporations. A service corporation that is a benefit corporation is not limited by ss. 180.1903 and 180.1905 in its authority to create general public benefit or a specific public benefit.

AB742,9,4 SUBCHAPTER III

AB742,9,5 ACCOUNTABILITY

AB742,9,11 202.301 Standard of conduct for directors. (1) Consideration of interests. (a) Notwithstanding ss. 180.0302 (15) and 180.0827, in discharging the duties of their respective positions, the board of directors, committees of the board, and individual directors of a benefit corporation, in considering the best interests of the benefit corporation, shall consider the effects of any action or inaction on all of the following:

AB742,9,12 1. The shareholders of the benefit corporation.

AB742,9,14 2. The employees and workforce of the benefit corporation and its subsidiaries and suppliers.

AB742,9,16 3. The interests of customers as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation.

AB742,9,19 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.

AB742,9,20 5. The local and global environment.

AB742,9,24 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 corporate independence of the benefit corporation.

AB742,10,2 7. The ability of the benefit corporation to accomplish its general public benefit purpose and any specific public benefit purpose.

AB742,10,6 (b) Notwithstanding ss. 180.0302 (15) and 180.0827, in discharging the duties of their respective positions, the board of directors, committees of the board, and individual directors of a benefit corporation, in considering the best interests of the benefit corporation, may consider any of the following:

AB742,10,8 1. The resources, intent, and conduct of any person seeking to acquire control of the corporation.

AB742,10,10 2. Any other pertinent factors or the interests of any other group that is deemed appropriate.

AB742,10,15 (c) Under pars. (a) and (b), the board of directors, committees of the board, and individual directors of a benefit corporation are not required to give priority to the interests of any particular person or group referred to in pars. (a) or (b) over the interests of any other person or group unless the benefit corporation has stated in its articles its intention to give such priority.

AB742,10,19 (2) Coordination with other provisions of law. The consideration of interests and factors in the manner required by sub. (1) does not constitute a violation of s. 180.0801 or any other provision of ch. 180 and is in addition to the ability of directors to consider interests and factors as provided in s. 180.0827.

AB742,10,21 (3) Exoneration from personal liability. A director of a benefit corporation is not personally liable, as such, for monetary damages for any of the following:

AB742,10,23 (a) Any action taken as a director if the director performed the duties of his or her office in compliance with this section and the provisions of ch. 180.

AB742,10,25 (b) Failure of the benefit corporation to pursue or create general public benefit or specific public benefit.

AB742,11,3 (4) Limitation on standing. A director does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.

AB742,11,8 202.302 Benefit director. (1) General rule. The board of directors of a benefit corporation shall include one director who shall be designated the "benefit director" and shall have, in addition to all of the powers, duties, rights, and immunities of the other directors of the benefit corporation, the powers, duties, rights, and immunities provided in this section.

AB742,11,14 (2) Election, removal, and qualifications. The benefit director shall be elected, and may be removed, in the manner provided by subch. VIII of ch. 180, and shall be an individual who is independent. The benefit director may serve as the benefit officer at the same time as serving as the benefit director. The articles or bylaws of a benefit corporation may prescribe additional qualifications of the benefit director not inconsistent with this subsection.

AB742,11,25 (3) Annual compliance statement. The benefit director shall prepare, and the benefit corporation shall include in the annual benefit report to shareholders required by s. 202.401, a statement whether, in the opinion of the benefit director, the benefit corporation acted in accordance with its general public benefit purpose and any specific public benefit purpose in all material respects during the period covered by the report and whether the directors and officers complied with ss. 202.301 (1) and 202.303 (1), respectively. If in the opinion of the benefit director the benefit corporation or its directors or officers failed to comply with ss. 202.301 (1) and 202.303 (1), then the statement of the benefit director shall include a description of the ways in which the benefit corporation or its directors or officers failed to comply with ss. 202.301 (1) and 202.303 (1).

AB742,12,3 (4) Status of actions. The acts of an individual in the capacity of a benefit director shall constitute for all purposes acts of that individual in the capacity of a director of the benefit corporation.

AB742,12,8 (5) Alternative governance arrangements. If a benefit corporation has elected under s. 180.1821 not to have a board of directors, then the bylaws of the benefit corporation must provide that the shareholders who perform the duties of a board of directors shall include a person with the powers, duties, rights, and immunities of a benefit director.

AB742,12,13 (6) Exoneration from personal liability. Notwithstanding s. 180.0828 and any provision of a benefit corporation's bylaws, a benefit director shall not be personally liable for any act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing, willful misconduct, or a knowing violation of law.

AB742,12,19 202.303 Standard of conduct for officers. (1) General rule. Each officer of a benefit corporation shall consider the interests and factors described in s. 202.301 (1) in the manner provided in that subsection when the officer has discretion to act with respect to a matter and it reasonably appears to the officer that the matter may have a material effect on the creation of general or specific public benefit by the benefit corporation or on any of the interests or factors referred to in s. 202.301 (1).

AB742,12,22 (2) Coordination with other provisions of law. The consideration of interests and factors in the manner described in sub. (1) shall not constitute a violation of s. 180.0841 or any other provision of ch. 180.

AB742,13,2 (3) Exoneration from personal liability. An officer of a benefit corporation is not personally liable, as such, for monetary damages for any action taken as an officer if the officer performed the duties of the position in compliance with this section and the provisions of ch. 180.

AB742,13,4 202.304 Benefit officer. (1) Designation. A benefit corporation may have an officer designated the "benefit officer."

AB742,13,9 (2) Functions. A benefit officer shall have the powers and duties, as provided in the bylaws and as determined by the board of directors, relating to the benefit corporation's purpose of creating general public benefit or specific public benefit. If a benefit corporation has a benefit officer, the duties of the benefit officer shall include preparing the benefit report required by s. 202.401.

AB742,13,16 202.305 Right of action. (1) General rule. The duties of directors and officers under this chapter, and the general and any specific public benefit purpose of a benefit corporation, may be enforced only in a benefit enforcement proceeding. No person may bring an action or assert a claim against a benefit corporation or its directors or officers with respect to the duties of directors and officers under this chapter and the general and any specific public benefit purpose of the benefit corporation except in a benefit enforcement proceeding.

AB742,13,19 (2) Parties with standing. A benefit enforcement proceeding may be commenced or maintained only directly by the benefit corporation or derivatively by any of the following:

AB742,13,20 (a) A shareholder.

AB742,13,21 (b) A director.

AB742,13,24 (c) A person or group of persons that owns beneficially or of record 10 percent or more of the equity interest in an entity of which the benefit corporation is a subsidiary.

AB742,14,2 (d) Any other person that is specified in the articles or bylaws of the benefit corporation.

AB742,14,3 SUBCHAPTER IV

AB742,14,4 TRANSPARENCY

AB742,14,6 202.401 Annual benefit report. (1) General rule. A benefit corporation shall prepare an annual benefit report including all of the following:

AB742,14,7 (a) A narrative description of all of the following:

AB742,14,9 1. The ways in which the benefit corporation pursued general public benefit during the year and the extent to which general public benefit was created.

AB742,14,12 2. The ways in which the benefit corporation pursued any specific public benefit that the articles state it is the purpose of the benefit corporation to create and the extent to which that specific public benefit was created.

AB742,14,14 3. Any circumstances that have hindered the creation by the benefit corporation of general public benefit or specific public benefit.

AB742,14,18 (b) An assessment of the social and environmental performance of the benefit corporation, prepared in accordance with a 3rd-party standard applied consistently with any application of that standard in prior benefit reports or accompanied by an explanation of the reasons for any inconsistent application.

AB742,14,20 (c) The name of the benefit director and the benefit officer, if any, and the address to which correspondence to each of them may be directed.

AB742,14,22 (d) The compensation paid by the benefit corporation during the year to each director in the capacity of a director.

AB742,14,25 (e) The name of each person that owns 5 percent or more of the outstanding shares of the benefit corporation either beneficially, to the extent known to the benefit corporation without independent investigation, or of record.

AB742,15,1 (f) The statement of the benefit director described in s. 202.302 (3).

AB742,15,5 (2) Timing and delivery of report. A benefit corporation shall annually send a benefit report to each shareholder within 120 days following the end of the fiscal year of the benefit corporation or at the same time that the benefit corporation delivers any other annual report to its shareholders.

AB742,15,9 (3) Internet Web site posting. A benefit corporation shall post its most recent benefit report on the public portion of its Internet Web site, if any, except that the compensation paid to directors and any financial or proprietary information included in the benefit report may be omitted from the benefit report as posted.

AB742,15,15 (4) Filing of report. Concurrently with the delivery of the benefit report to shareholders under sub. (2), the benefit corporation shall deliver a copy of the benefit report to the department for filing, except that the compensation paid to directors and any financial or proprietary information included in the benefit report may be omitted from the benefit report as filed under this section. The department shall charge a fee of $70 for filing a benefit report.

AB742,15,22 (5) Failure to file report. If a benefit corporation has not delivered a benefit report to the department for a period of 2 years, the department may prepare and file a statement that the corporation has forfeited its status as a benefit corporation and is no longer subject to this chapter. If the corporation subsequently delivers a benefit report to the department for filing, the status of the corporation as a benefit corporation shall be automatically reinstated upon the filing of the benefit report by the department and the corporation shall again be subject to this chapter.

AB742,15,23 (End)