HB 757

1
A bill to be entitled
2An act relating to benefit corporations; creating s.
3607.2001, F.S.; defining terms; creating s. 607.2003,
4F.S.; providing applicability; creating s. 607.2005,
5F.S.; providing for the organization of benefit
6corporations; creating s. 607.2007, F.S.; providing
7for existing corporations to become benefit
8corporations; creating s. 607.2009, F.S.; authorizing
9a corporation to terminate its status as a benefit
10corporation; creating s. 607.2011, F.S.; requiring the
11corporate purposes set forth in the articles of
12incorporation of a benefit corporation to include
13certain public benefits; authorizing benefit
14corporations to set forth certain public benefit
15purposes in their bylaws; authorizing the board of
16directors of a benefit corporation to adopt certain
17public benefit purposes for the corporation under
18certain circumstances; creating s. 607.2013, F.S.;
19prescribing certain standards of conduct for, and
20limiting the liability of, directors of benefit
21corporations; creating s. 207.2015, F.S.; limiting the
22liability of officers of a benefit corporation;
23creating s. 607.2017, F.S.; authorizing a benefit
24corporation to bring enforcement actions for certain
25claims against directors and officers of the
26corporation; providing for commencement and
27maintenance of the proceedings; creating s. 607.2019,
28F.S.; requiring a benefit corporation to submit an
29annual benefit report to the Department of State and
30the corporation's shareholders; providing for public
31disclosure of the annual benefit reports; authorizing
32the department to adopt rules; amending s. 607.0128,
33F.S.; revising the required contents of a certificate
34of status, to conform; providing an effective date.
35
36Be It Enacted by the Legislature of the State of Florida:
37
38     Section 1.  Section 607.2001, Florida Statutes, is created
39to read:
40     607.2001  Definitions; ss. 607.2001-607.2019.-As used in
41ss. 607.2001-607.2019, the term:
42     (1)  "Benefit corporation" means a corporation organized
43under this chapter that elects to become subject to ss.
44607.2001-607.2019, the status of which as a benefit corporation
45has not been terminated under s. 607.2009.
46     (2)  "General public benefit" means a material positive
47impact on society and the environment taken as a whole, as
48measured by an independent third-party standard, from the
49business and operations of the benefit corporation.
50     (3)  "Independent" means not having a material relationship
51with a benefit corporation or any of its subsidiaries, either
52directly as a shareholder of the benefit corporation or as a
53partner, a member, or an owner of any of its subsidiaries or
54indirectly as a director, an officer, an owner, or a manager of
55an entity that has a material relationship with the benefit
56corporation or any of its subsidiaries. A material relationship
57between a person and a benefit corporation or any of its
58subsidiaries is conclusively presumed to exist if:
59     (a)  The person is or, within the previous 3 years, has
60been an employee of the benefit corporation or any of its
61subsidiaries;
62     (b)  An immediate family member of the person is or, within
63the previous 3 years, has been an officer of the benefit
64corporation or any of its subsidiaries; or
65     (c)  There is beneficial ownership of 5 percent or more of
66the outstanding shares of the benefit corporation by the person
67or an entity:
68     1.  Of which the person is a director, an officer, or a
69manager; or
70     2.  In which the person owns beneficially 5 percent or more
71of the outstanding equity interests, which percentage is
72calculated as if all outstanding rights to acquire equity
73interests in the entity are exercised.
74     (4)  "Independent third-party standard" means a recognized
75standard for defining, reporting, and assessing corporate social
76and environmental performance that:
77     (a)  Is developed by a person who is independent of the
78benefit corporation.
79     (b)  Is transparent because the following information about
80the standard is publicly available:
81     1.  The factors considered when measuring the performance
82of a business.
83     2.  The relative weightings of those factors.
84     3.  The identity of the persons that develop and control
85changes to the standard and the process by which those changes
86are made.
87     (5)  "Specific public benefit" means a benefit that serves
88one or more public welfare, religious, charitable, scientific,
89literary, or educational purposes, or other purpose or benefit
90beyond the strict interests of the shareholders of the benefit
91corporation.
92     (6)  "Subsidiary" means, in relation to an individual, an
93entity in which the individual either:
94     (a)  Directly or indirectly owns equity interests entitled
95to cast a majority of the votes entitled to be cast generally in
96an election of directors or members of the governing body of the
97entity; or
98     (b)  Otherwise owns or controls voting or contractual power
99to exercise effective governing control of the entity. The
100percentage of ownership of equity interests or ownership or
101control of power to exercise control is calculated as if all
102outstanding rights to acquire equity interests in the entity are
103exercised.
104     Section 2.  Section 607.2003, Florida Statutes, is created
105to read:
106     607.2003  Application and effect of ss. 607.2001-607.2019.-
107     (1)  Sections 607.2001-607.2019 apply to all benefit
108corporations in the state.
109     (2)  Any provision in ss. 607.2001-607.2019 does not itself
110create the implication that a contrary or different law applies
111to a corporation organized under this chapter that is not a
112benefit corporation. Sections 607.2001-607.2019 do not affect
113any law that applies to a corporation that is not a benefit
114corporation.
115     (3)  The provisions of ss. 607.2001-607.2019 shall control
116over the general provisions of this chapter with respect to a
117benefit corporation.
118     Section 3.  Section 607.2005, Florida Statutes, is created
119to read:
120     607.2005  Organization of benefit corporations.-A benefit
121corporation must be organized under this chapter, except that
122its articles of incorporation, as initially filed with the
123Department of State or as amended, must also state that it is a
124benefit corporation.
125     Section 4.  Section 607.2007, Florida Statutes, is created
126to read:
127     607.2007  Election of status after incorporation.-A
128corporation that was not organized as a benefit corporation may
129become a benefit corporation by amending its articles of
130incorporation to contain, in addition to the requirements of s.
131607.0202, a statement that the corporation is a benefit
132corporation. Any such amendment must be adopted under s.
133607.1003 and be approved by all shareholders entitled to vote on
134the amendment or, if shares have not yet been issued, the
135amendment must be approved under s. 607.1005.
136     Section 5.  Section 607.2009, Florida Statutes, is created
137to read:
138     607.2009  Termination of status.-A corporation may
139terminate its status as a benefit corporation and cease to be
140subject to ss. 607.2001-607.2019 by amending its articles of
141incorporation to delete the statement required in ss. 607.2005
142and 607.2007 that the corporation is a benefit corporation. Any
143such amendment must be adopted under s. 607.1003 and be approved
144by all shareholders entitled to vote on the amendment or, if
145shares have not yet been issued, the amendment must be approved
146under s. 607.1005.
147     Section 6.  Section 607.2011, Florida Statutes, is created
148to read:
149     607.2011  Corporate purposes; general and specific public
150benefits.-
151     (1)  A benefit corporation must have as one of its purposes
152the creation of the general public benefit. A benefit
153corporation must include this purpose, in addition to the lawful
154purpose or purposes for which the corporation is organized under
155s. 607.0301, in its articles of incorporation.
156     (2)  A benefit corporation may also have as one of its
157purposes the creation of one or more of the following specific
158public benefits:
159     (a)  Providing low-income or underserved individuals or
160communities with beneficial products or services.
161     (b)  Promoting economic opportunity for individuals or
162communities beyond the creation of jobs in the normal course of
163business.
164     (c)  Preserving the environment.
165     (d)  Improving human health.
166     (e)  Promoting the arts, sciences, or advancement of
167knowledge.
168     (f)  Increasing the flow of capital to entities with a
169public benefit purpose.
170     (g)  Conferring any other particular benefit on society or
171the environment.
172
173Any specific public benefit created under this subsection does
174not satisfy the obligation of the benefit corporation to create
175the general public benefit.
176     (3)(a)  A benefit corporation may set forth a specific
177public benefit purpose in its articles of incorporation or
178bylaws and, except as otherwise provided in the articles of
179incorporation or bylaws, the board of directors may also adopt a
180specific public benefit purpose for the corporation.
181     (b)  A benefit corporation may amend its articles of
182incorporation to add, amend, or delete a specific public benefit
183purpose. Any such amendment must be approved under s. 607.1003.
184     (4)  A benefit corporation may only create the general
185public benefit and any specific public benefit, if such benefits
186are within the best interests of the benefit corporation.
187     Section 7.  Section 607.2013, Florida Statutes, is created
188to read:
189     607.2013  Standards for directors of benefit corporations.-
190     (1)  In accordance with the general standards for directors
191of corporations in s. 607.0830, in discharging the duties of his
192or her respective position and considering the best interests of
193the benefit corporation, a member of the board of directors, a
194member of a committee, or an individual director of a benefit
195corporation:
196     (a)  Shall consider the effects of any corporate action
197upon:
198     1.  The shareholders of the benefit corporation.
199     2.  The employees and workforce of the benefit corporation
200and its subsidiaries and suppliers.
201     3.  The interests of customers as beneficiaries of the
202general and any specific public benefit purposes of the benefit
203corporation.
204     4.  Community and societal considerations, including those
205of each community in which offices or facilities of the benefit
206corporation and its subsidiaries and suppliers are located.
207     5.  The local and global environment.
208     6.  The short-term and long-term interests of the benefit
209corporation, including benefits that may accrue to the benefit
210corporation from its long-term plans and the possibility that
211these interests and the general and any specific public benefit
212purposes of the benefit corporation may be best served by the
213continued independence of the benefit corporation.
214     7.  The ability of the benefit corporation to create the
215general public benefit and any of its specific public benefit
216purposes.
217     (b)  May consider:
218     1.  The factors listed in s. 607.0830(3).
219     2.  The resources; intent; and past, stated, and potential
220conduct of any person seeking to acquire control of the benefit
221corporation.
222     3.  Other pertinent factors or the interests of any other
223person who he or she deems appropriate.
224     (c)  Need not give priority to the interests of a
225particular person or group referred to in paragraph (a) or
226paragraph (b) over the interests of any other person or group
227unless the benefit corporation states its intention to give
228priority to interests related to any specific public benefit
229purpose set forth in its articles of incorporation or bylaws or
230otherwise adopted by its board of directors.
231     (2)  Consideration of interests and factors in the manner
232required under subsection (1) does not constitute a violation of
233s. 607.0830 or a conflict of interest under s. 607.0832.
234     (3)  In any proceeding brought by or on behalf of a benefit
235corporation or its shareholders, a director is not personally
236liable for monetary damages for:
237     (a)  Any action taken as a director, if the director
238complied with s. 607.0830 and this section in the performance of
239his or her duties.
240     (b)  Failure of the benefit corporation to create the
241general public benefit or any specific public benefit.
242     Section 8.  Section 207.2015, Florida Statutes, is created
243to read:
244     207.2015  Limitation of liability of officers.-An officer
245of a benefit corporation is not liable for any action taken in
246the performance of his or her duties as an officer, which he or
247she believes, in his or her good faith business judgment, is
248consistent with:
249     (1)  The general public benefit purpose of the benefit
250corporation or any specific public benefit purpose set forth in
251its articles of incorporation or bylaws or otherwise adopted by
252its board of directors.
253     (2)  The requirements of any independent third-party
254standard in effect for the benefit corporation.
255     Section 9.  Section 607.2017, Florida Statutes, is created
256to read:
257     607.2017  Benefit enforcement proceedings.-
258     (1)  A benefit corporation may bring an action for any
259claim against a director or officer of the corporation for:
260     (a)  Failing to pursue the general public benefit purpose
261of the benefit corporation or any specific public benefit
262purpose set forth in its articles of incorporation or bylaws or
263otherwise adopted by its board of directors.
264     (b)  Violating a duty or standard of conduct under ss.
265607.2001-607.2019.
266     (c)  Failing to prepare and make available the annual
267benefit report required under s. 607.2019.
268     (2)  A benefit enforcement proceeding brought under
269subsection (1) shall exclusively be commenced and maintained:
270     (a)  Directly by the benefit corporation; or
271     (b)  Derivatively by:
272     1.  A shareholder of the benefit corporation;
273     2.  A director of the benefit corporation;
274     3.  A person or group who owns beneficially or of record 10
275percent or more of the equity interests in an entity of which
276the benefit or corporation is a subsidiary; or
277     4.  Any other person specifically authorized in the
278articles of incorporation or bylaws of the benefit corporation.
279     (3)(a)  The enforcement of any claim against a director or
280officer of a benefit corporation for conduct described in
281subsection (1) shall be enforced exclusively through a benefit
282enforcement proceeding brought under this section.
283     (b)  A person may not bring an action or assert a claim
284against a benefit corporation or its directors or officers with
285respect to the conduct described in subsection (1), except in a
286benefit enforcement proceeding brought under this section.
287     Section 10.  Section 607.2019, Florida Statutes, is created
288to read:
289     607.2019  Annual benefit report.-
290     (1)  A benefit corporation shall prepare an annual benefit
291report in the format prescribed by the Department of State which
292includes the following:
293     (a)  A narrative description of:
294     1.  The ways in which the benefit corporation pursued the
295general public benefit during the year and the extent to which
296the general public benefit was created.
297     2.  The ways in which the benefit corporation pursued any
298specific public benefit during the year and extent to which that
299specific public benefit was created.
300     3.  Any circumstances that hindered the creation by the
301benefit corporation of the general or any specific public
302benefit.
303     (b)  An assessment of the social and environmental
304performance of the benefit corporation. The assessment must be:
305     1.  Prepared in accordance with an independent third-party
306standard specified in the articles of incorporation, the bylaws,
307or otherwise adopted by the board of directors and applied
308consistently with any application of that standard in previous
309benefit reports; or
310     2.  Accompanied by an explanation of the reasons for any
311inconsistent application.
312     (c)  Any other information or disclosures that may be
313required under any independent third-party standard adopted by
314the directors of the benefit corporation.
315     (2)(a)  A benefit corporation must annually file its
316benefit report with the Department of State by a date prescribed
317by the department.
318     (b)  A benefit corporation must also submit a copy of its
319annual benefit report to each shareholder of the corporation
320within 120 days after the end of the corporation's fiscal year
321or upon submitting any other annual report to its shareholders.
322     (3)  A benefit corporation shall post its most recent
323benefit report on a publicly accessible portion of its Internet
324website, if any. If a benefit corporation does not have an
325Internet website, it must make a written or electronic copy of
326its most recent benefit report available to the public upon
327written request. A benefit corporation is not required to
328publicly disclose to persons other than its shareholders any
329proprietary, confidential, or individual compensation
330information contained in its benefit report, to the extent that
331any independent third-party standard adopted by the directors of
332the benefit corporation permits the omission of such information
333from public disclosure.
334     (4)  The Department of State may adopt rules to administer
335this section.
336     Section 11.  Paragraphs (c) through (e) of subsection (2)
337of section 607.0128, Florida Statutes, are redesignated as
338paragraphs (d) through (f), respectively, and a new paragraph
339(c) is added to that subsection to read:
340     607.0128  Certificate of status.-
341     (2)  A certificate of status or authorization sets forth:
342     (c)  If the corporation is a benefit corporation under ss.
343607.2001-607.2019, a statement that the corporation is a benefit
344corporation.
345     Section 12.  This act shall take effect upon becoming a
346law.


CODING: Words stricken are deletions; words underlined are additions.