THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY PAYTON, BELFANTI, BROWN, CALTAGIRONE, COHEN, JOSEPHS, MURT, SIPTROTH, WAGNER AND YOUNGBLOOD, SEPTEMBER 22, 2010

REFERRED TO COMMITTEE ON COMMERCE, SEPTEMBER 22, 2010  

AN ACT

Amending Title 15 (Corporations and Unincorporated Associations)

of the Pennsylvania Consolidated Statutes, in domestic

business corporation ancillaries, providing for benefit

corporations.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Title 15 of the Pennsylvania Consolidated

Statutes is amended by adding a chapter to read:

CHAPTER 32

BENEFIT CORPORATIONS

Sec.

§ 3201.  Definitions.

§ 3202.  Applicability.

§ 3203.  Election.

§ 3204.  Termination.

§ 3205.  Notice.

§ 3206.  Purpose.

§ 3207.  Duties and immunity of directors.

§ 3208.  Information to stockholders.

§ 3201.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Benefit corporation."  A Pennsylvania corporation that

elects to be a benefit corporation in accordance with section

3203 (relating to election) and had not ceased to be a benefit

corporation through the operation of section 3204 (relating to

termination).

"General public benefit."  A material, positive impact on

society and the environment, as measured by a third-party

standard, through activities that promote a combination of

specific public benefits.

"Specific public benefit."  The term includes the following:

(1)  providing individuals or communities with beneficial

products or services;

(2)  promoting economic opportunity for individuals or

communities beyond the creation of jobs in the normal course

of business;

(3)  preserving the environment;

(4)  improving human health;

(5)  promoting the arts, sciences or advancement of

knowledge;

(6)  increasing the flow of capital to entities with a

public benefit purpose; or

(7)  accomplishing any other particular benefit for

society of the environment.

"Third-party standard."  A standard for defining, reporting

and assessing best practices in corporate social and

environmental performance that:

(1)  Is developed by a person or entity that is

independent of a benefit corporation.

(2)  Is transparent because the following information

about the standard is publicly available or accessible:

(i)  the factors considered when measuring the

performance of a business;

(ii)  the relative weightings of the factors; and

(iii)  the identity of the persons who develop and

control changes to the standard and the process by which

the changes were made.

§ 3202.  Applicability.

(a)  General rule.--The provisions of this title apply to

benefit corporations except to the extent that:

(1)  the context of a provision clearly requires

otherwise; or

(2)  a specific provision of this chapter or another

provision of law governing specific classes of corporations

provides otherwise.

(b)  Limitation.--This chapter applies only to benefit

corporations.

(c)  Construction.--

(1)  The existence of a provision of this chapter shall

not be construed as establishing that a contrary or different

rule of law is or would be applicable to a corporation that

is not a benefit corporation.

(2)  This chapter shall not be construed to affect any

statute or rule of law as it applies to a corporation that is

not a benefit corporation.

(d)  Articles of incorporation and bylaws.--A provision of

the articles of incorporation or bylaws of a benefit corporation

may not be inconsistent with any provision of this chapter.

§ 3203.  Election.

(a)  General rule.--A corporation may elect to be a benefit

corporation under this chapter by amending or including in the

articles of incorporation of the corporation a statement that

the corporation is a benefit corporation.

(b)  Procedure.--An amendment described in subsection (a)

shall be approved in accordance with Subchapter B of Chapter 19

(relating to amendment of articles).

§ 3204.  Termination.

(a)  General rule.--A corporation may terminate status as a

benefit corporation and cease to be subject to this chapter by

amending the articles of incorporation of the corporation to

delete the statement that the corporation is a benefit

corporation.

(b)  Procedure.--An amendment terminating a corporation's

status as a benefit corporation shall be approved by the

stockholders of the corporation in accordance with Subchapter B

of Chapter 19 (relating to amendment of articles).

§ 3205.  Notice.

Reference to the fact that a corporation is a benefit

corporation shall appear prominently:

(1)  At the head of the articles of incorporation or

articles of amendment in which the election to be a benefit

corporation is made.

(2)  At the head of each subsequent document filed with

the department.

(3)  On each certificate representing outstanding stock

of the benefit corporation.

§ 3206.  Purpose.

(a)    General public benefit.--

(1)  Each benefit corporation shall have the purpose of

creating a general public benefit.

(2)  The purpose required in paragraph (1) shall be in

addition to, and may be a limitation on, the purposes of the

corporation under section 1301 (relating to purposes).

(b)  Specific public benefit.--

(1)  In addition to its purposes under section 1301 and

subsection (a), the articles of incorporation of a benefit

corporation may identify as one of the purposes of the

benefit corporation the creation of one or more specific

public benefits.

(2)  The identification in its articles of incorporation

of a specific public benefit purpose under paragraph (1) does

not limit the duty of a benefit corporation to create a

general public benefit.

(c)  Best interests.--The creation of a general public

benefit or specific public benefit as provided in subsections

(a) and (b) shall be deemed to be in the best interests of the

benefit corporation.

§ 3207.  Duties and immunity of directors.

(a)  General rule.--A director of a benefit corporation, in

performing the duties of a director, including the director's

duties as a member of a committee and in addition to the duties

described in Subchapter C of Chapter 17 (relating to directors

and officers):

(1)  In determining what the director reasonably believes

to be in the best interests of the benefit corporation, shall

consider the effects of any action or decision not to act on:

(i)  The stockholders of the benefit corporation.

(ii)  The employees and workforce of the benefit

corporation and the subsidiaries and suppliers of the

benefit corporation.

(iii)  The interests of customers as beneficiaries of

the general public benefit or specific public benefit

purposes of the benefit corporation.

(iv)  Community and societal considerations,

including those of any community in which offices or

facilities of the benefit corporation or the subsidiaries

or suppliers of the benefit corporation are located.

(v)  The local and global environment.

(2)  May consider any other pertinent factors or the

interests of any other group that the director determines are

appropriate to consider.

(b)  No duty to beneficiaries.--A director of a benefit

corporation, in the performance of duties in that capacity, does

not have any duty to a person who is a beneficiary of the public

benefit purposes of the benefit corporation.

(c)  Limitation of liability.--A director of a benefit

corporation, in the reasonable performance of duties in

accordance with the standard provided in this chapter, has no

liability by reason of being or having been a director of a

benefit corporation.

§ 3208.  Information to stockholders.

(a)  Annual benefit report.--A benefit corporation shall

deliver to each stockholder an annual benefit report that

includes:

(1)  A description of:

(i)  The ways in which the benefit corporation

pursued a general public benefit during the year and the

extent to which the general public benefit was created.

(ii)  The ways in which the benefit corporation

pursued any specific public benefit that its articles of

incorporation state is the purpose of the benefit

corporation and the extent to which that specific public

benefit was created.

(iii)  Any circumstances that have hindered the

creation by the benefit corporation of the general public

benefit or specific public benefit.

(2)  An assessment of the societal and environmental

performance of the benefit corporation prepared in accordance

with a third-party standard applied consistently with the

prior year's benefit report or accompanied by an explanation

of the reasons for any inconsistent application.

(b)  Time period for delivery of report.--The annual benefit

report shall be delivered to each stockholder within 120 days

following the end of each fiscal year of the benefit

corporation.

(c)  Posting and dissemination to public.--

(1)  A benefit corporation shall post its most recent

annual benefit report on the public portion of its Internet

website, if any.

(2)  If a benefit corporation does not have a public

Internet website, the benefit corporation shall provide a

copy of its most recent annual benefit report on demand and

without charge to any person who requests a copy.

Section 2.  This act shall take effect in 60 days.