2015 - 2016 LEGISLATURE
February 23, 2015 - Introduced by Representatives Kooyenga, Hesselbein,
Macco, Johnson, Goyke, Knudson, Sanfelippo, Subeck, Kleefisch, C.
Taylor, Kulp, Doyle, Kahl, Quinn, Knodl, Ripp, Genrich, Barca, Berceau,
Kremer, Zamarripa, Spreitzer, Hintz and Hebl, cosponsored by Senators
Darling, Wirch, Lassa, Ringhand and Olsen. Referred to Committee on
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.
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:
Chapter 204 of the statutes is created to read:
6204.101 Application and effect of chapter. (1) General rule.
This chapter 7
shall be applicable to all benefit corporations.
1(2) Application of business corporation law generally
. The existence of a 2
provision of this chapter shall not of itself create an implication that a contrary or 3
different rule of law is applicable to a business corporation that is not a benefit 4
corporation. This chapter shall not affect any statute or rule that is applicable to a 5
business corporation that is not a benefit corporation.
6(3) Laws applicable to benefit corporations.
Except as otherwise provided in 7
this chapter, ch. 180 shall be generally applicable to all benefit corporations. The 8
specific provisions of this chapter shall control over the general provisions of ch. 180. 9
A benefit corporation may be simultaneously subject to this chapter and provisions 10
of other chapters.
11(4) Organic records.
A provision of the articles or bylaws of a benefit 12
corporation may not relax, be inconsistent with, or supersede a provision of this 13
Unless the context clearly indicates otherwise, in this 15
"Benefit corporation" means a business corporation that has elected to 17
become subject to this chapter and whose status as a benefit corporation has not been 18
terminated under s. 204.105.
"Benefit director" means the person designated as the benefit director of a 20
benefit corporation as provided in s. 204.302.
"Benefit officer" means the officer of a benefit corporation, if any, designated 22
as the benefit officer as provided in s. 204.304.
"Entity" has the meaning given in s. 180.0103 (8).
"General public benefit" means a material positive impact on society and 2
the environment by the operations of a benefit corporation taken as a whole, through 3
activities that promote some combination of specific public benefits.
"Service corporation" has the meaning given in s. 180.1901 (2).
"Specific public benefit" includes all of the following:
(a) Providing low-income or underserved individuals or communities with 7
beneficial products or services.
(b) Promoting economic opportunity for individuals or communities beyond the 9
creation of jobs in the normal course of business.
(c) Preserving the environment.
(d) Improving human health.
(e) Promoting the arts, sciences, or advancement of knowledge.
(f) Increasing the flow of capital to entities with a public benefit purpose.
(g) The accomplishment of any other particular benefit for society or the 15
16204.103 Formation of benefit corporations.
A benefit corporation shall be 17
formed in accordance with ch. 180, except that its articles shall also state that it is 18
a benefit corporation.
19204.104 Election of an existing business corporation to become a
20benefit corporation. (1) Amendment.
An existing business corporation may 21
become a benefit corporation under this chapter by amending its articles so that they 22
contain, in addition to the requirements of s. 180.0202, a statement that the 23
corporation is a benefit corporation.
24(2) Fundamental transactions.
If a corporation that is not a benefit 25
corporation is a party to a merger, consolidation, or division or is the exchanging
corporation in a share exchange, and the surviving, new, or any resulting corporation 2
in the merger, consolidation, division, or share exchange is to be a benefit 3
corporation, then the plan of merger, consolidation, division, or share exchange shall 4
not be effective unless the articles of the surviving, new, or resulting corporation 5
contain a statement that the corporation is a benefit corporation.
6204.105 Termination of benefit corporation status.
A benefit corporation 7
may terminate its status as such and cease to be subject to this chapter by amending 8
its articles to delete the provision required by ss. 204.103 and 204.104 to be stated 9
in the articles of a benefit corporation.
12204.201 Corporate purposes. (1) General public benefit purpose.
benefit corporation shall have a purpose of creating general public benefit. This 14
purpose is in addition to its purpose under s. 180.0301 and any specific purpose set 15
forth in its articles under sub. (2).
16(2) Optional specific public benefit purpose.
The articles of a benefit 17
corporation may identify one or more specific public benefits that it is the purpose 18
of the benefit corporation to create in addition to its purposes under s. 180.0301 and 19
sub. (1). The identification of a specific public benefit under this subsection does not 20
limit the obligation of a benefit corporation to create general public benefit.
21(3) Effect of purposes.
The creation of general public benefit and specific 22
public benefit as provided in subs. (1) and (2) shall be considered to be in the best 23
interests of the benefit corporation.
A benefit corporation may amend its articles to add, amend, 2
or delete the identification of a specific public benefit that it is the purpose of the 3
benefit corporation to create.
4(5) Service corporations.
A service corporation that is a benefit corporation 5
is not limited by ss. 180.1903 and 180.1905 in its authority to create general public 6
benefit or a specific public benefit.