House amendment #1 makes the following changes to the 2nd edition:
Amends the definition for general public benefit, found in GS 55-18-03, to no longer require the impact to be as measured by a third-party standard. Deletes the term and definition for third-party standard.
Amends GS 55-18-50(a)(2), providing that the required annual benefit report must include an assessment of the social and environmental performance of the benefit corporation accompanied by an explanation of the reasons for any inconsistent application.
Deletes GS 55-18-50(a)(7), which required that a statement regarding any relationship between the benefit corporation and the entity that developed the third-party standard be included in the required annual benefit report.
House amendment #2 makes the following changes to the 2nd edition:
Amends GS 55-18-21(a), regarding the transition to benefit corporation status by an existing domestic corporation or another corporation or other entity that is party to a merger, conversion, etc., providing that an amendment under these subsections must be approved by the unanimous vote of the outstanding shares or each class and series of stock of the corporation (previously, required to be approved by an affirmative vote of 90%).
House amendment #3 makes the following changes to the 2nd edition:
Amends GS 55-18-43, Right of action; benefit enforcement proceeding, providing that a benefit enforcement proceeding can be commenced or maintained derivatively by an individual shareholder in the benefit corporation (was, a shareholder that owns 5% or more of the shares) and also by a person or group of persons that owns, directly or indirectly, outstanding equity voting interest in an entity of which the benefit corporation is a subsidiary (previously, required the person or group to own 5% or more of the outstanding equity voting interest).
House amendment #4 makes the following changes to the 2nd edition:
Amends GS 55-18-40, Standard of conduct for directors, deleting the requirements that as part of their duties, directors of a benefit corporation must consider what the effects of any action or decision not to act will be in regards to the local community or society, including the interest of each community in which offices or facilities of the benefit corporation, its subsidiaries, or suppliers are located, and that they consider the local and global environment.
House amendment #5 makes the following changes to the 2nd edition:
Amends GS 55-18-30, Corporate purposes, providing that a benefit corporation is required to include as a corporate purpose in its articles of incorporation one or more specific public benefit purposes in addition to its purposes under GS 55-18-30(a) (previously, a benefit corporation was allowed to include those purposes but was not required to).
Bill Summaries: H440 NORTH CAROLINA BENEFIT CORPORATION ACT.
Summary date: May 15 2013 - View Summary
Summary date: May 8 2013 - View Summary
House committee substitute makes the following changes to the 1st edition.
Amends GS 55-18-21, Transition to benefit corporation status, providing that an existing domestic corporation can become a benefit corporation after amending its articles of incorporation. Such an amendment under this subsection must be approved by the affirmative vote of 90% of the outstanding shares or each class and series of stock of the corporation, voting as separate voting groups, regardless of any limitation in the corporation's articles of incorporation or bylaws of the voting rights of such class or series (previously, only required such an amendment to be approved as required in GS 55-18-23). Similarly, if a corporation or other entity that is not a benefit corporation is a party to a merger, conversion, or share exchange, with the resulting entity to become a benefit corporation, the plan of merger, conversion, or share exchange must also be approved by the affirmative vote of 90% of the outstanding shares or each class and series of stock of the corporation, voting as separate voting groups, regardless of any limitation in the corporation's articles of incorporation or bylaws of the voting rights of such class or series (previously, only required such an amendment to be approved as required in GS 55-18-23).
Amends GS 55-13-02(a)(4), providing that the occurrence of an amendment to the articles of incorporation, changing the corporation into a benefit corporation, is a corporate action that entitles a shareholder to appraisal rights and payment of the fair value of that shareholder's shares.
Summary date: Mar 26 2013 - View Summary
Identical to S 99, filed 2/19/13.
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 domestic 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 55-18-22 (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 general public benefit to mean the material positive impact on society and environment, as measured from a third-party standard, arising from the business and operations of a benefit corporation. Defines specific public benefit purpose to mean a corporate purpose 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. Provides that a benefit corporation is not entitled to claim an exemption from any property tax imposed under Subchapter II of GS Chapter 105.
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 domestic 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 of a benefit corporation. Requires that the board of directors of a benefit corporation designate by resolution one director who is an independent person to be the benefit director. Delineates the powers, duties, rights, and immunities specific to the Benefit Director. Allows for the designation of a benefit officer and provides for the officer's duties. Provides that the benefit director may serve as the benefits officer at the same time as serving as the benefit director.
Limits enforcement of the duties of directors under the Benefit Corporation Act to only in a benefit enforcement proceeding. Provides guidelines for commencing or maintaining 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 for a period of five years; 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.
Makes a conforming change to GS 55-13-02(a), which concerns shareholders' dissenting rights.
Effective October 1, 2013.