House committee substitute makes the following changes to 2nd edition.
Changes the act’s effective date from December 1, 2011, to October 1, 2012. Makes technical changes.
Summary date: May 24 2012 - View summary
Summary date: Mar 21 2011 - View summary
Senate committee substitute makes the following changes to 1st edition.
Amends proposed Article 18, adding that a benefit corporation is not entitled to claim an exemption from any property tax imposed under Subchapter II of GS Chapter 105. Expands the definition for third-party standard, and makes other clarifying and organizational changes to definitions applicable to the proposed Article. Also modifies when a material relationship is presumed to exist, found within the definition of independent person. Clarifies that a domestic corporation, including a converted domestic corporation, may be incorporated as a benefit corporation by stating such in the initial articles of incorporation. Requires the articles of incorporation to also identify any specific public benefit purpose, as specified, and any provision required or permitted by law. Adds a requirement that shareholder meetings must provide notice and discussion of the transition to or resulting existence of a benefit corporation. Includes a requirement that shareholder meetings provide notice and discussion of the anticipated effect on the shareholders of terminating the benefit corporation status. Clarifies the heightened voting requirements applicable to certain actions in proposed Article 18 setting the voting percentages to be net according to the type of entity.
Clarifies that the standard of conduct applies to the directors of a benefit corporation (was, applies to the board of directors, committees of the board, and individual directors). Specifies that a director is not liable for monetary damages arising out of an action for any act or omission to act, other than any act or omission that the director, at the time of such act or omission, knew or believed to be clearly in conflict with the benefit corporation’s general public benefit purpose or any stated specific public benefit purpose (expands previously proposed language). Indicates that the board of directors of a benefit corporation must by resolution designate a benefit director. Clarifies the duties of the benefit director. Deletes provision specifying the standard of conduct for officers. Clarifies the duties of the benefit officer, and adds that the officer must monitor the benefit corporation’s pursuit of general and any specific public benefit purposes.
Clarifies that a benefit enforcement proceeding may be commenced or maintained by a shareholder that owns 5% or more of the benefit corporation’s shares, a person or group of persons owning 5% or more (was, 10% or more) of the outstanding equity voting interests in an entity in which the benefit corporation is a subsidiary, or by one of the other preexisting entities. Adds that a benefit enforcement proceeding commenced or maintained derivatively is subject to the requirements applicable to derivative proceedings under Part 4 of Article 7 of GS Chapter 55, except that such requirements must be interpreted as specified. Adds that a benefit corporation’s annual benefit report must also include a statement of any relationship between the benefit corporation and the entity that developed the third-party standard that might affect the credibility of the objective assessment of the third-party standard. Clarifies that the benefit corporation must post each annual benefit report on the public portion of the corporation’s website for a period of five years. Adds a section, making a conforming change to GS 55-13-02(a), which concerns shareholders’ dissenting rights. Makes additional clarifying and technical changes.
Summary date: Feb 1 2011 - View summary
Adds new Article 18, The North Carolina Benefit Corporation Act (Benefit Corporation Act), to GS Chapter 55. Provides that new Article 18 applies to all benefit corporations and defines benefit corporations to mean a business corporation that elects to become subject to the Benefit Corporation Act and that has not terminated its status as a benefit corporation under proposed GS 55-18-23 (termination of benefit corporation status). Provides additional details regarding the application and effect of the Benefit Corporation Act.
Provides definitions for the terms used in the Benefit Corporation Act. Defines specific public benefit to mean conferring any particular benefit on society or the environment. Requires that the formation of a benefit corporation adhere to the provisions of the other Articles in GS Chapter 55 but that the articles of incorporation for the benefit corporation must state that it is a benefit corporation.
Requires heightened voting requirements for some actions and changes within a benefit corporation that are in addition to provisions of other Articles in GS Chapter 55. Provides process for a business corporation to elect to become a benefit corporation under proposed Article 18. Includes process for termination of benefit corporation status. Directs that the purpose of a benefit corporation must be to create general public benefit and that this purpose is in addition to any lawful business purpose.
Includes accountability provisions setting standards of conduct for directors and officers of a benefit corporation. Requires that the board of directors of a benefit corporation include one director who is designated as the Benefit Director. Delineates the powers, duties, rights, and immunities specific to the Benefit Director. Provides for election or removal of the Benefit Director under the provisions of Part 1 of Article 8 of GS Chapter 55.
Allows for the designation of a benefit officer and provides for the officer’s duties. Limits enforcement of the duties of directors and officers under the Benefit Corporation Act to only in a benefit enforcement proceeding. Provides guidelines for commencing or maintain a benefit enforcement proceeding.
Requires that a benefit corporation prepare an annual benefit report to be sent to each shareholder. Additionally requires the benefit corporation to post its annual benefit report on the public portion of its web site; however, permits redaction of information regarding compensation paid to directors and any financial or proprietary information included in the benefit report.
Requires the annual report that must be submitted by a benefit corporation to the Secretary of Revenue, or to the Secretary of State under GS 55-16-22, to include the most recent benefit report delivered to shareholders, but allows omission of the information regarding compensation paid to directors and any financial or proprietary information included in the benefit report.
Effective December 1, 2011.