Bill Summary for S 26 (2011-2012)

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Summary date: 

Feb 1 2011

Bill Information:

View NCGA Bill Details2011-2012 Session
Senate Bill 26 (Public) Filed Tuesday, February 1, 2011
Intro. by Vaughan, Stevens, Kinnaird.

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Bill 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.