(A) The following definitions apply to this chapter:
(1) "Benefit corporation" means a domestic corporation that has elected to become subject to this chapter and that has not terminated its status as a benefit corporation pursuant to Section 33-38-220.
(2) "Benefit director" means either:
(a) the director of the benefit corporation as designated pursuant to Section 33-38-410; or
(b) a person with one or more powers, duties, or rights of a benefit director to the extent provided in the articles of incorporation pursuant to Section 33-38-410(D).
(3) "Benefit enforcement proceeding" means any claim or action for any of the following:
(a) failing to pursue or create the general public benefit or a specific public benefit purpose pursuant to its articles of incorporation; or
(b) violating a duty or standard of conduct under this chapter.
(4) "Benefit officer" means the officer of the benefit corporation designated as such pursuant to Section 33-38-420.
(5) "General public benefit" means a material positive impact on society and the environment taken as a whole, as assessed against a third-party standard, from the business and operations of a benefit corporation.
(6) "Independent person" means, with respect to a benefit corporation, a person who does not have any material relationship with the benefit corporation or a subsidiary of the benefit corporation, either directly as a shareholder of the benefit corporation or as a partner, a member, or an owner of a subsidiary of the benefit corporation or indirectly as a director, an officer, a general partner, or a manager of an entity that has a material relationship with the benefit corporation or a subsidiary of the benefit corporation. A person does not have a material relationship solely by virtue of serving as the benefit director or the benefit officer of the benefit corporation or of any subsidiary of the benefit corporation that is itself a benefit corporation. A material relationship between a person and the benefit corporation or any of its subsidiaries is presumed to exist if any of the following apply:
(a) the person is, or has been within the last three years, an employee, other than the benefit officer, of the benefit corporation or a subsidiary of the benefit corporation;
(b) an immediate family member of the person is, or has been within the last three years, an officer, other than the benefit officer, of the benefit corporation or a subsidiary of the benefit corporation; or
(c) the person, or an entity in which the person is a director, an officer, a general partner, or a manager or owns, directly or indirectly, five percent or more of the outstanding equity interests, or owns, directly or indirectly, five percent or more of the outstanding shares of any series or class of stock of the benefit corporation.
(7) "Specific public benefit purpose" means a benefit that serves one or more public welfare, religious, charitable, scientific, literary, or educational purposes, or other purposes or benefits beyond the strict interest of the shareholders of the benefit corporation, including:
(a) providing low-income or underserved individuals, families, or communities with beneficial products, services, or educational opportunities;
(b) promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;
(c) preserving or improving the environment;
(d) improving human health;
(e) promoting the arts, sciences, or advancement of knowledge;
(f) increasing the flow of capital to entities with a public benefit purpose; or
(g) conferring any other particular benefit on society and the environment.
(8) "Subsidiary of a person" means an entity in which the person owns, beneficially or of record, fifty percent or more of the outstanding equity interests.
(9) "Third-party standard" means a standard for defining, reporting, and assessing corporate, social, and environmental performance that meets all of the following requirements:
(a) the standard assesses the effect of the business and its operations upon the interests listed in items (2) through (5) of Section 33-38-400(A);
(b) the standard is developed by an entity that is independent of the benefit corporation and satisfies the following:
(i) not more than one-third of the members of the governing body of the entity are representatives of an association of businesses operating in a specific industry the performance of whose members is measured by the standard, businesses from a specific industry or an association of businesses in that industry, or businesses whose performance is assessed against the standard; or
(ii) the entity is not materially financed by an association or business described in subitem (i) of this item;
(c) the standard is developed by a person that satisfies the following:
(i) has access to necessary expertise to assess overall corporate, social, and environmental performance; and
(ii) uses a balanced multistakeholder approach including a public comment period of at least thirty days to develop the standard;
(d) the standard is transparent because the following information about the standard is publicly available:
(i) the criteria considered when measuring the overall social and environmental performance of a business, as well as the relative weightings of those criteria; and
(ii) the process for the development and revision of the standard, including:
(A) the identity of the directors, officers, any material owners, and the governing body of the entity that developed and controls revisions to the standard;
(B) the process by which revisions to the standard and changes to the membership of the governing body are made; and
(C) an accounting of the sources of financial support for the entity, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.
(B) For purposes of the definitions of "independent person" and "subsidiary of a person" in subsection (A) of this section, a percentage of ownership in an entity must be calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.
HISTORY: 2012 Act No. 277, Section 1, eff June 14, 2012.