| 1 | A bill to be entitled |
| 2 | An act relating to benefit corporations; creating s. |
| 3 | 607.2001, F.S.; defining terms; creating s. 607.2003, |
| 4 | F.S.; providing applicability; creating s. 607.2005, |
| 5 | F.S.; providing for the organization of benefit |
| 6 | corporations; creating s. 607.2007, F.S.; providing |
| 7 | for existing corporations to become benefit |
| 8 | corporations; creating s. 607.2009, F.S.; authorizing |
| 9 | a corporation to terminate its status as a benefit |
| 10 | corporation; creating s. 607.2011, F.S.; requiring the |
| 11 | corporate purposes set forth in the articles of |
| 12 | incorporation of a benefit corporation to include |
| 13 | certain public benefits; authorizing benefit |
| 14 | corporations to set forth certain public benefit |
| 15 | purposes in their bylaws; authorizing the board of |
| 16 | directors of a benefit corporation to adopt certain |
| 17 | public benefit purposes for the corporation under |
| 18 | certain circumstances; creating s. 607.2013, F.S.; |
| 19 | prescribing certain standards of conduct for, and |
| 20 | limiting the liability of, directors of benefit |
| 21 | corporations; creating s. 207.2015, F.S.; limiting the |
| 22 | liability of officers of a benefit corporation; |
| 23 | creating s. 607.2017, F.S.; authorizing a benefit |
| 24 | corporation to bring enforcement actions for certain |
| 25 | claims against directors and officers of the |
| 26 | corporation; providing for commencement and |
| 27 | maintenance of the proceedings; creating s. 607.2019, |
| 28 | F.S.; requiring a benefit corporation to submit an |
| 29 | annual benefit report to the Department of State and |
| 30 | the corporation's shareholders; providing for public |
| 31 | disclosure of the annual benefit reports; authorizing |
| 32 | the department to adopt rules; amending s. 607.0128, |
| 33 | F.S.; revising the required contents of a certificate |
| 34 | of status, to conform; providing an effective date. |
| 35 |
|
| 36 | Be It Enacted by the Legislature of the State of Florida: |
| 37 |
|
| 38 | Section 1. Section 607.2001, Florida Statutes, is created |
| 39 | to read: |
| 40 | 607.2001 Definitions; ss. 607.2001-607.2019.-As used in |
| 41 | ss. 607.2001-607.2019, the term: |
| 42 | (1) "Benefit corporation" means a corporation organized |
| 43 | under this chapter that elects to become subject to ss. |
| 44 | 607.2001-607.2019, the status of which as a benefit corporation |
| 45 | has not been terminated under s. 607.2009. |
| 46 | (2) "General public benefit" means a material positive |
| 47 | impact on society and the environment taken as a whole, as |
| 48 | measured by an independent third-party standard, from the |
| 49 | business and operations of the benefit corporation. |
| 50 | (3) "Independent" means not having a material relationship |
| 51 | with a benefit corporation or any of its subsidiaries, either |
| 52 | directly as a shareholder of the benefit corporation or as a |
| 53 | partner, a member, or an owner of any of its subsidiaries or |
| 54 | indirectly as a director, an officer, an owner, or a manager of |
| 55 | an entity that has a material relationship with the benefit |
| 56 | corporation or any of its subsidiaries. A material relationship |
| 57 | between a person and a benefit corporation or any of its |
| 58 | subsidiaries is conclusively presumed to exist if: |
| 59 | (a) The person is or, within the previous 3 years, has |
| 60 | been an employee of the benefit corporation or any of its |
| 61 | subsidiaries; |
| 62 | (b) An immediate family member of the person is or, within |
| 63 | the previous 3 years, has been an officer of the benefit |
| 64 | corporation or any of its subsidiaries; or |
| 65 | (c) There is beneficial ownership of 5 percent or more of |
| 66 | the outstanding shares of the benefit corporation by the person |
| 67 | or an entity: |
| 68 | 1. Of which the person is a director, an officer, or a |
| 69 | manager; or |
| 70 | 2. In which the person owns beneficially 5 percent or more |
| 71 | of the outstanding equity interests, which percentage is |
| 72 | calculated as if all outstanding rights to acquire equity |
| 73 | interests in the entity are exercised. |
| 74 | (4) "Independent third-party standard" means a recognized |
| 75 | standard for defining, reporting, and assessing corporate social |
| 76 | and environmental performance that: |
| 77 | (a) Is developed by a person who is independent of the |
| 78 | benefit corporation. |
| 79 | (b) Is transparent because the following information about |
| 80 | the standard is publicly available: |
| 81 | 1. The factors considered when measuring the performance |
| 82 | of a business. |
| 83 | 2. The relative weightings of those factors. |
| 84 | 3. The identity of the persons that develop and control |
| 85 | changes to the standard and the process by which those changes |
| 86 | are made. |
| 87 | (5) "Specific public benefit" means a benefit that serves |
| 88 | one or more public welfare, religious, charitable, scientific, |
| 89 | literary, or educational purposes, or other purpose or benefit |
| 90 | beyond the strict interests of the shareholders of the benefit |
| 91 | corporation. |
| 92 | (6) "Subsidiary" means, in relation to an individual, an |
| 93 | entity in which the individual either: |
| 94 | (a) Directly or indirectly owns equity interests entitled |
| 95 | to cast a majority of the votes entitled to be cast generally in |
| 96 | an election of directors or members of the governing body of the |
| 97 | entity; or |
| 98 | (b) Otherwise owns or controls voting or contractual power |
| 99 | to exercise effective governing control of the entity. The |
| 100 | percentage of ownership of equity interests or ownership or |
| 101 | control of power to exercise control is calculated as if all |
| 102 | outstanding rights to acquire equity interests in the entity are |
| 103 | exercised. |
| 104 | Section 2. Section 607.2003, Florida Statutes, is created |
| 105 | to read: |
| 106 | 607.2003 Application and effect of ss. 607.2001-607.2019.- |
| 107 | (1) Sections 607.2001-607.2019 apply to all benefit |
| 108 | corporations in the state. |
| 109 | (2) Any provision in ss. 607.2001-607.2019 does not itself |
| 110 | create the implication that a contrary or different law applies |
| 111 | to a corporation organized under this chapter that is not a |
| 112 | benefit corporation. Sections 607.2001-607.2019 do not affect |
| 113 | any law that applies to a corporation that is not a benefit |
| 114 | corporation. |
| 115 | (3) The provisions of ss. 607.2001-607.2019 shall control |
| 116 | over the general provisions of this chapter with respect to a |
| 117 | benefit corporation. |
| 118 | Section 3. Section 607.2005, Florida Statutes, is created |
| 119 | to read: |
| 120 | 607.2005 Organization of benefit corporations.-A benefit |
| 121 | corporation must be organized under this chapter, except that |
| 122 | its articles of incorporation, as initially filed with the |
| 123 | Department of State or as amended, must also state that it is a |
| 124 | benefit corporation. |
| 125 | Section 4. Section 607.2007, Florida Statutes, is created |
| 126 | to read: |
| 127 | 607.2007 Election of status after incorporation.-A |
| 128 | corporation that was not organized as a benefit corporation may |
| 129 | become a benefit corporation by amending its articles of |
| 130 | incorporation to contain, in addition to the requirements of s. |
| 131 | 607.0202, a statement that the corporation is a benefit |
| 132 | corporation. Any such amendment must be adopted under s. |
| 133 | 607.1003 and be approved by all shareholders entitled to vote on |
| 134 | the amendment or, if shares have not yet been issued, the |
| 135 | amendment must be approved under s. 607.1005. |
| 136 | Section 5. Section 607.2009, Florida Statutes, is created |
| 137 | to read: |
| 138 | 607.2009 Termination of status.-A corporation may |
| 139 | terminate its status as a benefit corporation and cease to be |
| 140 | subject to ss. 607.2001-607.2019 by amending its articles of |
| 141 | incorporation to delete the statement required in ss. 607.2005 |
| 142 | and 607.2007 that the corporation is a benefit corporation. Any |
| 143 | such amendment must be adopted under s. 607.1003 and be approved |
| 144 | by all shareholders entitled to vote on the amendment or, if |
| 145 | shares have not yet been issued, the amendment must be approved |
| 146 | under s. 607.1005. |
| 147 | Section 6. Section 607.2011, Florida Statutes, is created |
| 148 | to read: |
| 149 | 607.2011 Corporate purposes; general and specific public |
| 150 | benefits.- |
| 151 | (1) A benefit corporation must have as one of its purposes |
| 152 | the creation of the general public benefit. A benefit |
| 153 | corporation must include this purpose, in addition to the lawful |
| 154 | purpose or purposes for which the corporation is organized under |
| 155 | s. 607.0301, in its articles of incorporation. |
| 156 | (2) A benefit corporation may also have as one of its |
| 157 | purposes the creation of one or more of the following specific |
| 158 | public benefits: |
| 159 | (a) Providing low-income or underserved individuals or |
| 160 | communities with beneficial products or services. |
| 161 | (b) Promoting economic opportunity for individuals or |
| 162 | communities beyond the creation of jobs in the normal course of |
| 163 | business. |
| 164 | (c) Preserving the environment. |
| 165 | (d) Improving human health. |
| 166 | (e) Promoting the arts, sciences, or advancement of |
| 167 | knowledge. |
| 168 | (f) Increasing the flow of capital to entities with a |
| 169 | public benefit purpose. |
| 170 | (g) Conferring any other particular benefit on society or |
| 171 | the environment. |
| 172 |
|
| 173 | Any specific public benefit created under this subsection does |
| 174 | not satisfy the obligation of the benefit corporation to create |
| 175 | the general public benefit. |
| 176 | (3)(a) A benefit corporation may set forth a specific |
| 177 | public benefit purpose in its articles of incorporation or |
| 178 | bylaws and, except as otherwise provided in the articles of |
| 179 | incorporation or bylaws, the board of directors may also adopt a |
| 180 | specific public benefit purpose for the corporation. |
| 181 | (b) A benefit corporation may amend its articles of |
| 182 | incorporation to add, amend, or delete a specific public benefit |
| 183 | purpose. Any such amendment must be approved under s. 607.1003. |
| 184 | (4) A benefit corporation may only create the general |
| 185 | public benefit and any specific public benefit, if such benefits |
| 186 | are within the best interests of the benefit corporation. |
| 187 | Section 7. Section 607.2013, Florida Statutes, is created |
| 188 | to read: |
| 189 | 607.2013 Standards for directors of benefit corporations.- |
| 190 | (1) In accordance with the general standards for directors |
| 191 | of corporations in s. 607.0830, in discharging the duties of his |
| 192 | or her respective position and considering the best interests of |
| 193 | the benefit corporation, a member of the board of directors, a |
| 194 | member of a committee, or an individual director of a benefit |
| 195 | corporation: |
| 196 | (a) Shall consider the effects of any corporate action |
| 197 | upon: |
| 198 | 1. The shareholders of the benefit corporation. |
| 199 | 2. The employees and workforce of the benefit corporation |
| 200 | and its subsidiaries and suppliers. |
| 201 | 3. The interests of customers as beneficiaries of the |
| 202 | general and any specific public benefit purposes of the benefit |
| 203 | corporation. |
| 204 | 4. Community and societal considerations, including those |
| 205 | of each community in which offices or facilities of the benefit |
| 206 | corporation 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 |
| 209 | corporation, including benefits that may accrue to the benefit |
| 210 | corporation from its long-term plans and the possibility that |
| 211 | these interests and the general and any specific public benefit |
| 212 | purposes of the benefit corporation may be best served by the |
| 213 | continued independence of the benefit corporation. |
| 214 | 7. The ability of the benefit corporation to create the |
| 215 | general public benefit and any of its specific public benefit |
| 216 | purposes. |
| 217 | (b) May consider: |
| 218 | 1. The factors listed in s. 607.0830(3). |
| 219 | 2. The resources; intent; and past, stated, and potential |
| 220 | conduct of any person seeking to acquire control of the benefit |
| 221 | corporation. |
| 222 | 3. Other pertinent factors or the interests of any other |
| 223 | person who he or she deems appropriate. |
| 224 | (c) Need not give priority to the interests of a |
| 225 | particular person or group referred to in paragraph (a) or |
| 226 | paragraph (b) over the interests of any other person or group |
| 227 | unless the benefit corporation states its intention to give |
| 228 | priority to interests related to any specific public benefit |
| 229 | purpose set forth in its articles of incorporation or bylaws or |
| 230 | otherwise adopted by its board of directors. |
| 231 | (2) Consideration of interests and factors in the manner |
| 232 | required under subsection (1) does not constitute a violation of |
| 233 | s. 607.0830 or a conflict of interest under s. 607.0832. |
| 234 | (3) In any proceeding brought by or on behalf of a benefit |
| 235 | corporation or its shareholders, a director is not personally |
| 236 | liable for monetary damages for: |
| 237 | (a) Any action taken as a director, if the director |
| 238 | complied with s. 607.0830 and this section in the performance of |
| 239 | his or her duties. |
| 240 | (b) Failure of the benefit corporation to create the |
| 241 | general public benefit or any specific public benefit. |
| 242 | Section 8. Section 207.2015, Florida Statutes, is created |
| 243 | to read: |
| 244 | 207.2015 Limitation of liability of officers.-An officer |
| 245 | of a benefit corporation is not liable for any action taken in |
| 246 | the performance of his or her duties as an officer, which he or |
| 247 | she believes, in his or her good faith business judgment, is |
| 248 | consistent with: |
| 249 | (1) The general public benefit purpose of the benefit |
| 250 | corporation or any specific public benefit purpose set forth in |
| 251 | its articles of incorporation or bylaws or otherwise adopted by |
| 252 | its board of directors. |
| 253 | (2) The requirements of any independent third-party |
| 254 | standard in effect for the benefit corporation. |
| 255 | Section 9. Section 607.2017, Florida Statutes, is created |
| 256 | to read: |
| 257 | 607.2017 Benefit enforcement proceedings.- |
| 258 | (1) A benefit corporation may bring an action for any |
| 259 | claim against a director or officer of the corporation for: |
| 260 | (a) Failing to pursue the general public benefit purpose |
| 261 | of the benefit corporation or any specific public benefit |
| 262 | purpose set forth in its articles of incorporation or bylaws or |
| 263 | otherwise adopted by its board of directors. |
| 264 | (b) Violating a duty or standard of conduct under ss. |
| 265 | 607.2001-607.2019. |
| 266 | (c) Failing to prepare and make available the annual |
| 267 | benefit report required under s. 607.2019. |
| 268 | (2) A benefit enforcement proceeding brought under |
| 269 | subsection (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 |
| 275 | percent or more of the equity interests in an entity of which |
| 276 | the benefit or corporation is a subsidiary; or |
| 277 | 4. Any other person specifically authorized in the |
| 278 | articles of incorporation or bylaws of the benefit corporation. |
| 279 | (3)(a) The enforcement of any claim against a director or |
| 280 | officer of a benefit corporation for conduct described in |
| 281 | subsection (1) shall be enforced exclusively through a benefit |
| 282 | enforcement proceeding brought under this section. |
| 283 | (b) A person may not bring an action or assert a claim |
| 284 | against a benefit corporation or its directors or officers with |
| 285 | respect to the conduct described in subsection (1), except in a |
| 286 | benefit enforcement proceeding brought under this section. |
| 287 | Section 10. Section 607.2019, Florida Statutes, is created |
| 288 | to read: |
| 289 | 607.2019 Annual benefit report.- |
| 290 | (1) A benefit corporation shall prepare an annual benefit |
| 291 | report in the format prescribed by the Department of State which |
| 292 | includes the following: |
| 293 | (a) A narrative description of: |
| 294 | 1. The ways in which the benefit corporation pursued the |
| 295 | general public benefit during the year and the extent to which |
| 296 | the general public benefit was created. |
| 297 | 2. The ways in which the benefit corporation pursued any |
| 298 | specific public benefit during the year and extent to which that |
| 299 | specific public benefit was created. |
| 300 | 3. Any circumstances that hindered the creation by the |
| 301 | benefit corporation of the general or any specific public |
| 302 | benefit. |
| 303 | (b) An assessment of the social and environmental |
| 304 | performance of the benefit corporation. The assessment must be: |
| 305 | 1. Prepared in accordance with an independent third-party |
| 306 | standard specified in the articles of incorporation, the bylaws, |
| 307 | or otherwise adopted by the board of directors and applied |
| 308 | consistently with any application of that standard in previous |
| 309 | benefit reports; or |
| 310 | 2. Accompanied by an explanation of the reasons for any |
| 311 | inconsistent application. |
| 312 | (c) Any other information or disclosures that may be |
| 313 | required under any independent third-party standard adopted by |
| 314 | the directors of the benefit corporation. |
| 315 | (2)(a) A benefit corporation must annually file its |
| 316 | benefit report with the Department of State by a date prescribed |
| 317 | by the department. |
| 318 | (b) A benefit corporation must also submit a copy of its |
| 319 | annual benefit report to each shareholder of the corporation |
| 320 | within 120 days after the end of the corporation's fiscal year |
| 321 | or upon submitting any other annual report to its shareholders. |
| 322 | (3) A benefit corporation shall post its most recent |
| 323 | benefit report on a publicly accessible portion of its Internet |
| 324 | website, if any. If a benefit corporation does not have an |
| 325 | Internet website, it must make a written or electronic copy of |
| 326 | its most recent benefit report available to the public upon |
| 327 | written request. A benefit corporation is not required to |
| 328 | publicly disclose to persons other than its shareholders any |
| 329 | proprietary, confidential, or individual compensation |
| 330 | information contained in its benefit report, to the extent that |
| 331 | any independent third-party standard adopted by the directors of |
| 332 | the benefit corporation permits the omission of such information |
| 333 | from public disclosure. |
| 334 | (4) The Department of State may adopt rules to administer |
| 335 | this section. |
| 336 | Section 11. Paragraphs (c) through (e) of subsection (2) |
| 337 | of section 607.0128, Florida Statutes, are redesignated as |
| 338 | paragraphs (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. |
| 343 | 607.2001-607.2019, a statement that the corporation is a benefit |
| 344 | corporation. |
| 345 | Section 12. This act shall take effect upon becoming a |
| 346 | law. |