Home to many of the nation’s largest corporations, Delaware is paving the way for a new type of for-profit business that balances its stockholders’ interests with those in the community.
Gov. Jack Markell joined state lawmakers announcing Senate Bill 47 which enables the formation of what are called, ‘public benefit corporations’ in Delaware.
“Delaware is rightfully recognized worldwide for its leading role in corporate law,” said Gov. Markell. “With the addition of Public Benefit Corporations, Delaware will continue to be a leader and support a new movement of social entrepreneurs and investors who are stepping forward to meet high standards of corporate purpose, accountability and transparency.”
Public benefit corporations are socially conscious for-profit corporations. Formed in the same manner other corporations are under Delaware’s General Corporation Law, a PBC’s certificate of incorporation must also include one or more specific benefits affecting those directly impacted by the corporation’s conduct.
Public benefits include cultural, educational and environmental causes, to name a few.
“I am proud to sponsor legislation which gives corporations a way to rebuild public trust in business by ensuring that the benefits of their work extend beyond their stockholders and managers,” said the bill’s lead sponsor Sen. David Sokola, D-Newark.
At least once every two years, a PBC must send its stockholders a statement with respect to its promotion of the public benefit(s) identified in its charter, as well as its promotion of the best interests of those materially affected by the corporation’s conduct.
In addition to bipartisan support, the Delaware State Bar Association and the Delaware Court of Chancery back SB 47.
If enacted, corporations would become eligible to form, convert or merge into a public benefit corporation beginning August 1, 2013.