Bill Text: IA SSB1181 | 2013-2014 | 85th General Assembly | Introduced
Bill Title: A study bill for an act providing for benefit corporations, and providing for fees.
Spectrum: Unknown
Status: (N/A - Dead) 2013-02-18 - In Economic Growth [SSB1181 Detail]
Download: Iowa-2013-SSB1181-Introduced.html
Senate
Study
Bill
1181
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
ECONOMIC
GROWTH
BILL
BY
CHAIRPERSON
SODDERS)
A
BILL
FOR
An
Act
providing
for
benefit
corporations,
and
providing
for
1
fees.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
1185XC
(2)
85
da/nh
S.F.
_____
SUBCHAPTER
I
1
PRELIMINARY
PROVISIONS
2
Section
1.
NEW
SECTION
.
490B.101
Short
title.
3
This
chapter
shall
be
known
and
may
be
cited
as
the
“Iowa
4
Benefit
Corporation
Act”
.
5
Sec.
2.
NEW
SECTION
.
490B.102
Definitions.
6
Except
as
otherwise
provided
in
this
chapter,
or
unless
the
7
context
otherwise
requires,
the
words
and
phrases
used
in
this
8
chapter
shall
have
the
same
meaning
as
the
words
and
phrases
9
used
in
chapter
490,
including
but
not
limited
to
the
words
10
and
phrases
used
in
section
490.140.
In
addition,
all
of
the
11
following
shall
apply:
12
1.
“Benefit
corporation”
means
a
business
corporation,
if
13
all
of
the
following
apply:
14
a.
It
has
elected
to
become
subject
to
this
chapter.
15
b.
Its
status
as
a
benefit
corporation
has
not
been
16
terminated.
17
2.
“Benefit
director”
means
any
of
the
following:
18
a.
A
director
designated
as
the
benefit
director
of
a
19
benefit
corporation
under
section
490B.302.
20
b.
A
person
with
one
or
more
of
the
powers,
duties,
or
21
rights
of
a
benefit
director
to
the
extent
provided
in
the
22
articles
of
incorporation,
bylaws,
or
a
shareholder
agreement
23
under
section
490B.302,
subsection
6.
24
3.
“Benefit
enforcement
proceeding”
means
a
claim
or
action
25
relating
to
any
of
the
following:
26
a.
The
failure
of
a
benefit
corporation
to
pursue
or
create
27
general
public
benefit
or
a
specific
public
benefit
set
forth
28
in
its
articles
of
incorporation.
29
b.
A
violation
of
any
obligation,
duty,
or
standard
of
30
conduct
provided
under
this
chapter.
31
4.
“Benefit
officer”
means
an
individual
designated
as
32
the
benefit
officer
of
a
benefit
corporation
under
section
33
490B.304.
34
5.
“Business
corporation”
means
a
corporation
formed
as
a
35
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domestic
corporation
under
chapter
490.
1
6.
“Entity”
means
a
person
formed
under
the
laws
of
2
this
state
including
but
not
limited
to
a
limited
liability
3
company
under
chapter
489;
a
corporation
under
chapter
490;
4
a
nonprofit
corporation
under
chapter
504;
a
partnership,
5
limited
partnership,
limited
liability
partnership,
or
limited
6
liability
limited
partnership
under
chapter
486A
or
488;
or
a
7
cooperative
association
or
other
cooperative
organized
under
8
chapter
497,
498,
499,
501,
or
501A.
9
7.
“General
public
benefit”
means
a
material
positive
impact
10
on
society
or
the
environment,
taken
as
a
whole,
assessed
11
against
a
third-party
standard,
which
results
from
the
business
12
and
operations
of
a
benefit
corporation.
13
8.
“Independent”
means
having
no
material
relationship
14
with
a
benefit
corporation
or
a
subsidiary
of
the
benefit
15
corporation
as
provided
in
section
490B.304A.
16
9.
“Minimum
status
vote”
means
any
of
the
following:
17
a.
In
the
case
of
a
business
corporation,
in
addition
to
any
18
other
required
approval
or
vote
required
under
chapter
490,
the
19
satisfaction
of
all
of
the
following
conditions:
20
(1)
The
shareholders
of
every
class
or
series
are
21
entitled
to
vote
as
a
separate
voting
group
on
the
corporate
22
action
regardless
of
a
limitation
stated
in
the
articles
of
23
incorporation
or
bylaws
regarding
the
voting
rights
of
any
24
class
or
series.
25
(2)
The
corporate
action
is
approved
by
vote
of
the
26
shareholders
of
each
class
or
series
entitled
to
cast
at
least
27
two-thirds
of
the
votes
that
all
shareholders
of
the
class
or
28
series
are
entitled
to
cast
on
the
action.
29
b.
In
the
case
of
an
entity
other
than
a
business
30
corporation,
in
addition
to
any
other
required
approval,
vote,
31
or
consent,
the
satisfaction
of
all
the
following
conditions:
32
(1)
The
holders
of
every
class
or
series
of
equity
interest
33
in
the
entity
that
are
entitled
to
receive
a
distribution
of
34
any
kind
from
the
entity
are
entitled
to
vote
on
or
consent
to
35
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the
action
regardless
of
any
otherwise
applicable
limitation
on
1
the
voting
or
consent
rights
of
any
class
or
series.
2
(2)
The
action
is
approved
by
vote
or
consent
of
the
3
holders
described
in
subparagraph
(1)
entitled
to
cast
at
least
4
two-thirds
of
the
votes
or
consents
that
all
of
those
holders
5
are
entitled
to
cast
on
the
action.
6
10.
“Specific
public
benefit”
means
any
of
the
following:
7
a.
Providing
low-income
or
underserved
individuals
or
8
communities
with
beneficial
products
or
services.
9
b.
Promoting
economic
opportunity
for
individuals
or
10
communities
beyond
the
creation
of
jobs
in
the
normal
course
11
of
business.
12
c.
Protecting
or
restoring
the
environment.
13
d.
Improving
human
health.
14
e.
Promoting
the
arts,
sciences,
or
advancement
of
15
knowledge.
16
f.
Increasing
the
flow
of
capital
to
entities
with
a
purpose
17
to
benefit
society
or
the
environment.
18
g.
Conferring
any
other
particular
benefit
on
society
or
the
19
environment.
20
11.
“Subsidiary”
means,
in
relation
to
a
person,
an
entity
21
in
which
the
person
holds
beneficially
or
of
record
fifty
22
percent
or
more
of
the
outstanding
equity
interests.
23
12.
“Third-party
standard”
means
a
recognized
standard
24
for
defining,
reporting,
and
assessing
corporate
social
or
25
environmental
performance
that
is
all
of
the
following:
26
a.
Comprehensive
because
the
standard
assesses
the
effect
of
27
the
business
and
its
operations
upon
the
interests
listed
in
28
section
490B.301,
subsection
1,
paragraphs
“b”
through
“e”
.
29
b.
Developed
by
an
entity
that
is
not
controlled
by
the
30
benefit
corporation.
31
c.
Credible
because
the
standard
is
developed
by
an
entity
32
that
meets
all
of
the
following
conditions:
33
(1)
Has
access
to
necessary
expertise
to
assess
overall
34
corporate
social
or
environmental
performance.
35
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(2)
Uses
a
balanced
multiple
stakeholder
approach
to
1
develop
the
standard,
including
a
reasonable
public
comment
2
period.
3
d.
Transparent
because
the
following
information
is
made
4
publicly
available:
5
(1)
A
description
of
the
standard
that
includes
all
of
the
6
following:
7
(a)
Criteria
considered
when
measuring
the
overall
social
8
or
environmental
performance
of
a
business
corporation.
9
(b)
The
relative
weightings,
if
any,
of
the
criteria
10
described
in
subparagraph
division
(a).
11
(2)
A
description
of
the
development
and
revision
of
the
12
standard
which
includes
all
of
the
following:
13
(a)
The
identity
of
the
directors,
officers,
material
14
owners,
and
the
governing
body
of
the
entity
that
developed
and
15
controls
revisions
to
the
standard.
16
(b)
The
process
by
which
revisions
to
the
standard
and
17
changes
to
the
membership
of
the
governing
body
are
made.
18
(c)
An
accounting
of
the
revenue
and
sources
of
financial
19
support
for
the
entity,
with
sufficient
detail
to
disclose
any
20
relationship
that
could
reasonably
be
considered
to
present
a
21
potential
conflict
of
interest.
22
Sec.
3.
NEW
SECTION
.
490B.103
Application
and
effect
of
23
chapter.
24
1.
This
chapter
applies
to
all
benefit
corporations.
25
2.
The
existence
of
a
provision
of
this
chapter
shall
not
26
of
itself
create
an
implication
that
a
contrary
or
different
27
rule
of
law
is
applicable
to
a
business
corporation
that
is
not
28
a
benefit
corporation.
This
chapter
shall
not
affect
a
statute
29
or
rule
of
law
that
is
applicable
to
a
business
corporation
30
that
is
not
a
benefit
corporation.
31
3.
Chapter
490
shall
be
construed
as
part
of
this
chapter
32
and
shall
apply
to
benefit
corporations,
including
but
not
33
limited
to
their
formation
or
organization,
reports,
fees,
34
authority,
powers,
rights,
and
the
regulation
and
conduct
of
35
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their
affairs.
1
4.
A
benefit
corporation
may
be
subject
simultaneously
to
2
this
chapter
and
one
or
more
other
chapters
of
this
title,
3
including
chapter
496C.
In
such
event,
the
provisions
of
4
this
chapter
shall
take
precedence
with
respect
to
a
benefit
5
corporation.
6
5.
A
provision
of
the
articles
of
incorporation
or
bylaws
of
7
a
benefit
corporation
shall
not
limit,
be
inconsistent
with,
or
8
supersede
a
provision
of
this
chapter.
9
Sec.
4.
NEW
SECTION
.
490B.104
Incorporation
of
benefit
10
corporation.
11
A
benefit
corporation
shall
be
incorporated
in
accordance
12
with
chapter
490,
division
II.
The
articles
of
incorporation
13
of
a
benefit
corporation
must
also
state
that
it
is
a
benefit
14
corporation.
15
Sec.
5.
NEW
SECTION
.
490B.105
Election
of
benefit
16
corporation
status.
17
1.
An
existing
business
corporation
may
become
a
benefit
18
corporation
under
this
chapter
by
amending
its
articles
of
19
incorporation
so
that
the
articles
contain,
in
addition
to
20
the
requirements
of
chapter
490,
division
II,
a
statement
21
that
the
corporation
is
a
benefit
corporation.
In
order
to
22
be
effective,
the
amendment
must
be
adopted
by
at
least
the
23
minimum
status
vote.
24
2.
a.
An
entity
that
is
not
a
benefit
corporation
may
25
become
a
benefit
corporation
pursuant
to
subsection
1
if
all
26
of
the
following
apply:
27
(1)
The
entity
is
one
of
the
following:
28
(a)
A
party
to
a
merger
or
conversion.
29
(b)
An
exchanging
entity
in
a
share
exchange.
30
(2)
The
surviving,
new,
or
resulting
entity
in
the
merger,
31
conversion,
or
share
exchange
is
to
be
a
benefit
corporation.
32
b.
In
order
to
be
effective,
a
plan
of
merger,
conversion,
33
or
share
exchange
subject
to
paragraph
“a”
must
be
adopted
by
at
34
least
the
minimum
status
vote.
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Sec.
6.
NEW
SECTION
.
490B.106
Termination
of
benefit
1
corporation
status.
2
1.
A
benefit
corporation
may
terminate
its
status
as
3
such
and
cease
to
be
subject
to
this
chapter
by
amending
its
4
articles
of
incorporation
to
delete
the
provision
required
by
5
section
490B.104
or
490B.105
to
be
stated
in
the
articles
of
a
6
benefit
corporation.
In
order
to
be
effective,
the
amendment
7
must
be
adopted
by
at
least
the
minimum
status
vote.
8
2.
If
a
plan
of
merger,
conversion,
or
share
exchange
9
would
have
the
effect
of
terminating
the
status
of
a
business
10
corporation
as
a
benefit
corporation,
the
plan
must
be
adopted
11
by
at
least
the
minimum
status
vote
in
order
to
be
effective.
12
Any
sale,
lease,
exchange,
or
other
disposition
of
all
or
13
substantially
all
of
the
assets
of
a
benefit
corporation,
14
unless
the
transaction
is
in
the
usual
and
regular
course
of
15
business,
shall
not
be
effective
unless
the
transaction
is
16
approved
by
at
least
the
minimum
status
vote.
17
SUBCHAPTER
II
18
CORPORATE
PURPOSES
19
Sec.
7.
NEW
SECTION
.
490B.201
Corporate
purposes.
20
1.
A
benefit
corporation
shall
have
a
purpose
of
creating
21
a
general
public
benefit.
This
purpose
is
in
addition
to
its
22
purpose
under
section
490.301.
23
2.
The
articles
of
incorporation
of
a
benefit
corporation
24
may
identify
one
or
more
specific
public
benefits
to
be
created
25
as
a
purpose
in
addition
to
any
purpose
provided
in
section
26
490.301
or
subsection
1.
The
identification
of
a
specific
27
public
benefit
under
this
subsection
does
not
limit
the
28
obligation
of
a
benefit
corporation
under
subsection
1.
29
3.
The
creation
of
a
general
public
benefit
as
described
30
in
subsection
1
and
a
specific
public
benefit
as
described
31
in
subsection
2
must
be
in
the
best
interests
of
the
benefit
32
corporation.
33
4.
A
benefit
corporation
may
amend
its
articles
of
34
incorporation
to
add,
amend,
or
delete
the
identification
of
a
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specific
public
benefit
that
it
is
the
purpose
of
the
benefit
1
corporation
to
create.
In
order
to
be
effective,
the
amendment
2
must
be
adopted
by
at
least
the
minimum
status
vote.
3
5.
A
professional
corporation
that
is
a
benefit
corporation
4
does
not
violate
section
496C.4
by
having
the
purpose
to
create
5
a
general
public
benefit
as
provided
in
subsection
1
or
a
6
specific
public
benefit
as
provided
in
subsection
2.
7
SUBCHAPTER
III
8
ACCOUNTABILITY
9
Sec.
8.
NEW
SECTION
.
490B.301
Standard
of
conduct
for
10
directors.
11
1.
In
discharging
the
duties
of
their
respective
positions
12
and
in
considering
the
best
interests
of
the
benefit
13
corporation,
a
benefit
corporation’s
board
of
directors,
14
committees,
and
individual
directors
shall
consider
the
effects
15
of
any
action
or
inaction
upon
all
of
the
following:
16
a.
The
shareholders
of
the
benefit
corporation.
17
b.
The
employees
and
workforce
of
the
benefit
corporation,
18
its
subsidiaries,
and
its
suppliers.
19
c.
The
interests
of
customers
as
beneficiaries
of
the
20
general
public
benefit
or
specific
public
benefit
of
the
21
benefit
corporation
as
provided
in
section
490B.201.
22
d.
Community
or
societal
factors,
including
those
of
23
each
community
in
which
offices
or
facilities
of
the
benefit
24
corporation,
its
subsidiaries,
or
its
suppliers
are
located.
25
e.
The
local
and
global
environment.
26
f.
The
short-term
and
long-term
interests
of
the
benefit
27
corporation,
including
but
not
limited
to
benefits
that
may
28
accrue
to
the
benefit
corporation
from
its
long-term
plans
and
29
the
possibility
that
these
interests
may
be
best
served
by
the
30
continued
independence
of
the
benefit
corporation.
31
g.
The
ability
of
the
benefit
corporation
to
create
its
32
general
public
benefit
or
any
specific
public
benefit
as
33
provided
in
section
490B.201.
34
2.
In
discharging
the
duties
of
their
respective
positions
35
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_____
and
in
considering
the
best
interests
of
the
benefit
1
corporation,
a
benefit
corporation’s
board
of
directors,
2
committees,
and
individual
directors
may
consider
any
of
the
3
following:
4
a.
The
interests
referred
to
in
section
490.1108A.
5
b.
Any
other
pertinent
factor
or
the
interest
of
any
other
6
person
or
group
of
persons
deemed
appropriate.
7
3.
In
discharging
the
duties
of
their
respective
positions
8
and
in
considering
the
best
interests
of
the
benefit
9
corporation,
a
benefit
corporation’s
board
of
directors,
10
committees,
and
individual
directors
need
not
give
priority
to
11
the
interest
of
a
particular
person
referred
to
in
subsection
1
12
or
2
over
the
interests
of
any
other
person
unless
the
benefit
13
corporation’s
articles
of
incorporation
state
the
benefit
14
corporation’s
intention
to
give
priority
to
a
certain
interest
15
related
to
a
general
public
benefit
or
a
specific
public
16
benefit
as
provided
in
section
490B.201.
17
4.
The
consideration
of
an
interest
or
factor
in
the
manner
18
required
by
subsections
1
through
3
shall
not
constitute
a
19
violation
of
section
490.830.
20
5.
Except
as
provided
in
the
articles
of
incorporation
or
21
bylaws
of
a
benefit
corporation,
a
director
is
not
personally
22
liable
for
monetary
damages
for
any
of
the
following:
23
a.
An
action
or
inaction
in
the
course
of
performing
the
24
duties
of
a
director
under
subsections
1
through
3
if
the
25
director
performed
the
duties
of
office
in
compliance
with
this
26
section
and
section
490.830.
27
b.
The
failure
of
the
benefit
corporation
to
pursue
or
28
create
a
general
public
benefit
or
a
specific
public
benefit
as
29
provided
in
section
490B.201.
30
6.
A
director
of
a
benefit
corporation
does
not
have
a
duty
31
to
a
person
who
is
a
beneficiary
of
the
general
public
benefit
32
or
a
specific
public
benefit
of
the
benefit
corporation
as
33
provided
in
section
490B.201,
arising
from
the
status
of
the
34
person
as
a
beneficiary.
35
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7.
A
director
of
a
benefit
corporation
who
makes
a
business
1
judgment
in
good
faith
fulfills
the
duty
under
this
section
if
2
all
of
the
following
apply:
3
a.
The
director
is
not
interested
in
the
subject
of
the
4
business
judgment.
5
b.
The
director
is
informed
with
respect
to
the
subject
of
6
the
business
judgment
to
the
extent
the
director
reasonably
7
believes
to
be
appropriate
under
the
circumstances.
8
c.
The
director
rationally
believes
that
the
business
9
judgment
is
in
the
best
interests
of
the
benefit
corporation.
10
Sec.
9.
NEW
SECTION
.
490B.302
Benefit
director.
11
1.
The
board
of
directors
of
a
benefit
corporation
that
is
12
a
publicly
traded
corporation
shall,
and
the
board
of
any
other
13
benefit
corporation
may,
include
a
director
who
is
designated
14
the
benefit
director.
Such
director
shall
have,
in
addition
15
to
the
powers,
duties,
rights,
and
immunities
of
the
other
16
directors
of
the
benefit
corporation,
the
powers,
duties,
17
rights,
and
immunities
provided
in
this
subchapter.
18
2.
a.
A
benefit
director
shall
be
elected,
and
may
be
19
removed,
in
the
manner
provided
by
chapter
490,
division
VIII,
20
part
A.
Except
as
provided
in
subsection
6,
the
benefit
21
director
shall
be
an
individual
who
is
independent.
The
22
benefit
director
may
serve
as
the
benefit
officer
at
the
23
same
time
as
serving
as
the
benefit
director.
The
articles
24
of
incorporation
or
bylaws
of
a
benefit
corporation
may
25
prescribe
additional
qualifications
of
the
benefit
director
not
26
inconsistent
with
this
paragraph.
27
b.
Notwithstanding
paragraph
“a”
,
a
benefit
director
of
28
a
professional
corporation
subject
to
chapter
496C
is
not
29
required
to
be
independent.
30
3.
The
benefit
director
shall
prepare,
and
the
benefit
31
corporation
shall
include
in
the
annual
benefit
report
to
32
shareholders
required
by
section
490B.401,
the
opinion
of
the
33
benefit
director
regarding
all
of
the
following:
34
a.
Whether
the
benefit
corporation
acted
in
accordance
with
35
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its
general
public
benefit
and
any
specific
public
benefit
as
1
provided
in
section
490B.201
in
all
material
respects
during
2
the
period
covered
by
the
report.
3
b.
Whether
the
directors
and
officers
complied
with
section
4
490B.301,
subsection
1,
and
section
490B.303,
subsection
1,
5
respectively.
6
c.
If,
in
the
opinion
of
the
benefit
director,
the
benefit
7
corporation’s
directors
or
officers
failed
to
comply
with
8
paragraph
“b”
,
a
description
of
the
ways
in
which
the
benefit
9
corporation’s
directors
or
officers
failed
to
comply.
10
4.
An
act
or
inaction
of
an
individual
in
the
capacity
of
a
11
benefit
director
shall
constitute
for
all
purposes
an
act
or
12
inaction
of
that
individual
in
the
capacity
of
a
director
of
13
the
benefit
corporation.
14
5.
Regardless
of
whether
the
articles
of
incorporation
or
15
bylaws
of
a
benefit
corporation
include
a
provision
eliminating
16
or
limiting
the
personal
liability
of
a
director
authorized
by
17
section
490.202,
a
benefit
director
is
not
personally
liable
18
for
an
act
or
omission
in
the
director’s
capacity
as
a
benefit
19
director
unless
the
act
or
omission
constitutes
self-dealing,
20
willful
misconduct,
or
a
knowing
violation
of
law.
21
6.
a.
The
articles
of
incorporation,
bylaws,
or
a
22
shareholder
agreement
under
section
490.732
of
a
benefit
23
corporation
shall
provide
that
the
persons
who
perform
the
24
duties
of
the
board
of
directors
include
a
person
with
the
25
powers,
duties,
rights,
and
immunities
of
a
benefit
director
if
26
the
articles
of
incorporation,
bylaws,
or
shareholder
agreement
27
provides
that
the
powers
and
duties
conferred
or
imposed
upon
28
the
board
of
directors
may
be
exercised
or
performed
by
a
29
person
other
than
the
directors.
30
b.
A
person
that
exercises
one
or
more
of
the
powers,
31
duties,
or
rights
of
a
benefit
director
under
paragraph
“a”
is
32
subject
to
all
of
the
following:
33
(1)
Is
not
required
to
be
independent
of
the
benefit
34
corporation.
35
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(2)
Has
the
immunities
of
a
benefit
director.
1
(3)
May
share
the
powers,
duties,
and
rights
of
a
benefit
2
director
with
one
or
more
other
persons.
3
(4)
Shall
not
be
subject
to
the
procedures
for
election
or
4
removal
of
directors
as
provided
in
chapter
490,
division
VIII,
5
part
A,
unless
any
of
the
following
applies:
6
(a)
The
person
is
also
a
director
of
the
benefit
7
corporation.
8
(b)
The
articles
of
incorporation,
bylaws,
or
a
shareholder
9
agreement
make
those
procedures
applicable.
10
Sec.
10.
NEW
SECTION
.
490B.303
Standard
of
conduct
for
11
officers.
12
1.
Each
officer
of
a
benefit
corporation
shall
consider
the
13
interests
and
factors
described
in
section
490B.301,
subsection
14
1,
in
the
manner
provided
in
that
subsection
if
all
of
the
15
following
apply:
16
a.
The
officer
has
discretion
to
act
with
respect
to
a
17
matter.
18
b.
It
reasonably
appears
to
the
officer
that
the
matter
19
may
have
a
material
effect
on
the
creation
by
the
benefit
20
corporation
of
its
general
public
benefit
or
a
specific
public
21
benefit
as
provided
in
section
490B.201.
22
2.
The
consideration
of
the
best
interests
of
the
benefit
23
corporation
in
the
manner
described
in
subsection
1
shall
not
24
constitute
a
violation
of
section
490.842.
25
3.
Except
as
provided
in
the
articles
of
incorporation
or
26
bylaws
of
a
benefit
corporation,
an
officer
is
not
personally
27
liable
for
monetary
damages
for
any
of
the
following:
28
a.
An
action
or
inaction
as
an
officer
in
the
course
of
29
performing
the
duties
of
an
officer
under
subsection
1
if
the
30
officer
performed
the
duties
of
the
position
in
compliance
with
31
section
490.842
and
this
section.
32
b.
The
failure
of
the
benefit
corporation
to
pursue
or
33
create
its
general
public
benefit
or
a
specific
public
benefit
34
as
provided
in
section
490B.201.
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4.
An
officer
does
not
have
a
duty
to
a
person
who
is
1
a
beneficiary
of
the
general
public
benefit
or
a
specific
2
public
benefit
of
the
benefit
corporation,
as
provided
in
3
section
490B.201,
arising
from
the
status
of
the
person
as
a
4
beneficiary.
5
5.
An
officer
who
makes
a
business
judgment
in
good
faith
6
fulfills
the
duty
under
this
section
if
all
of
the
following
7
apply:
8
a.
The
officer
is
not
interested
in
the
subject
of
the
9
business
judgment.
10
b.
The
officer
is
informed
with
respect
to
the
subject
of
11
the
business
judgment
to
the
extent
the
officer
reasonably
12
believes
to
be
appropriate
under
the
circumstances.
13
c.
The
officer
rationally
believes
that
the
business
14
judgment
is
in
the
best
interests
of
the
benefit
corporation.
15
Sec.
11.
NEW
SECTION
.
490B.304
Benefit
officer.
16
1.
A
benefit
corporation
may
have
an
officer
designated
as
17
the
benefit
officer.
18
2.
a.
A
benefit
officer
shall
have
the
powers
and
duties
19
relating
to
the
purpose
of
the
corporation
to
create
a
general
20
public
benefit
or
a
specific
public
benefit
as
provided
in
21
section
490B.201,
if
authorized
by
any
of
the
following:
22
(1)
The
articles
of
incorporation
or
bylaws
of
the
benefit
23
corporation.
24
(2)
Absent
any
controlling
provisions
in
the
articles
25
of
incorporation
or
bylaws
of
the
benefit
corporation,
by
26
resolution
or
order
of
the
benefit
corporation’s
board
of
27
directors.
28
b.
A
benefit
officer
shall
have
the
duty
to
prepare
the
29
benefit
report
required
by
section
490B.401.
30
Sec.
12.
NEW
SECTION
.
490B.304A
Benefit
officers
and
31
directors
——
criteria
for
independence.
32
1.
Serving
as
a
benefit
director
or
benefit
officer
33
shall
not
alone
affect
whether
an
individual
is
or
is
not
34
independent.
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2.
A
material
relationship
between
an
individual
and
a
1
benefit
corporation
or
any
of
its
subsidiaries
is
conclusively
2
presumed
to
exist
if
any
of
the
following
apply:
3
a.
The
individual
is,
or
has
been
within
the
last
three
4
years,
an
employee
other
than
a
benefit
officer
of
the
benefit
5
corporation
or
a
subsidiary.
6
b.
An
immediate
family
member
of
the
individual
is,
or
7
has
been
within
the
last
three
years,
an
executive
officer
8
other
than
a
benefit
officer
of
the
benefit
corporation
or
a
9
subsidiary.
10
c.
There
is
beneficial
or
record
ownership
of
five
percent
11
or
more
of
the
outstanding
shares
of
the
benefit
corporation,
12
calculated
as
if
all
outstanding
rights
to
acquire
equity
13
interests
in
the
benefit
corporation
had
been
exercised,
by
any
14
of
the
following:
15
(1)
The
individual.
16
(2)
An
entity
if
any
of
the
following
apply:
17
(a)
The
individual
is
a
director,
an
officer,
or
a
manager
18
of
the
entity.
19
(b)
The
individual
owns
beneficially
or
of
record
five
20
percent
or
more
of
the
entity’s
outstanding
equity
interests,
21
calculated
as
if
all
outstanding
rights
to
acquire
equity
22
interests
in
the
entity
had
been
exercised.
23
Sec.
13.
NEW
SECTION
.
490B.305
Right
of
action
——
benefit
24
enforcement
proceedings.
25
1.
a.
Except
in
a
benefit
enforcement
proceeding,
a
person
26
shall
not
bring
an
action
or
assert
a
claim
against
a
benefit
27
corporation
or
its
directors
or
officers
with
respect
to
any
28
of
the
following:
29
(1)
The
failure
of
the
benefit
corporation
to
pursue
or
30
create
a
general
public
benefit
or
a
specific
public
benefit
31
as
set
forth
in
its
articles
of
incorporation
as
provided
in
32
section
490B.201.
33
(2)
A
violation
of
an
obligation,
duty,
or
standard
of
34
conduct
under
this
chapter.
35
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b.
A
benefit
corporation
shall
not
be
liable
for
monetary
1
damages
under
this
chapter
for
any
failure
of
the
benefit
2
corporation
to
pursue
or
create
a
general
public
benefit
or
a
3
specific
public
benefit
as
provided
in
section
490B.201.
4
2.
A
benefit
enforcement
proceeding
may
be
commenced
or
5
maintained
only
as
follows:
6
a.
Directly
by
the
benefit
corporation.
7
b.
Derivatively,
in
accordance
with
chapter
490,
division
8
VII,
part
D
by
any
of
the
following:
9
(1)
A
person
or
group
of
persons
that
owns
beneficially
or
10
of
record
at
least
two
percent
of
the
total
number
of
shares
11
of
all
classes
and
series
outstanding
on
the
date
of
the
12
complained
of
action
or
inaction.
13
(2)
A
director
of
the
benefit
corporation.
14
(3)
A
person
or
group
of
persons
that
owns
beneficially
15
or
of
record
five
percent
or
more
of
the
outstanding
equity
16
interests
in
an
entity
of
which
the
benefit
corporation
is
a
17
subsidiary
on
the
date
of
the
complained
of
action
or
inaction.
18
(4)
Any
other
person
or
group
of
persons
as
specified
in
the
19
articles
of
incorporation
or
bylaws
of
the
benefit
corporation.
20
3.
For
purposes
of
this
section,
a
person
is
the
beneficial
21
owner
of
shares
or
equity
interests
if
the
shares
or
equity
22
interests
are
held
in
a
voting
trust
or
by
a
nominee
on
behalf
23
of
the
beneficial
owner.
24
SUBCHAPTER
IV
25
TRANSPARENCY
26
Sec.
14.
NEW
SECTION
.
490B.401
Preparation
of
annual
27
benefit
report.
28
1.
A
benefit
corporation
shall
prepare
an
annual
benefit
29
report
which
shall
include
at
least
all
of
the
following:
30
a.
A
narrative
description
of
all
of
the
following:
31
(1)
The
ways
in
which
the
benefit
corporation
pursued
or
32
created
a
general
public
benefit.
33
(2)
The
ways
in
which
the
benefit
corporation
pursued
34
or
created
a
specific
public
benefit,
as
provided
in
section
35
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S.F.
_____
490B.201,
to
the
extent
that
the
specific
public
benefit
is
1
stated
in
the
benefit
corporation’s
articles
of
incorporation.
2
(3)
Any
circumstances
that
have
hindered
the
pursuit
or
3
creation
of
a
general
public
benefit
or
a
specific
public
4
benefit
as
provided
in
section
490B.201.
5
(4)
The
process
and
rationale
for
selecting
or
changing
the
6
third-party
standard
used
to
prepare
the
benefit
report.
7
b.
An
assessment
of
the
overall
social
or
environmental
8
performance
of
the
benefit
corporation
against
a
third-party
9
standard
that
is
all
of
the
following:
10
(1)
Applied
consistently
with
any
application
of
the
11
third-party
standard
in
prior
benefit
reports.
12
(2)
Accompanied
by
an
explanation
of
the
reasons
for
any
of
13
the
following:
14
(a)
Inconsistent
application.
15
(b)
A
change
to
the
third-party
standard
from
the
standard
16
used
in
the
immediately
prior
report.
17
c.
The
name
of
the
benefit
director
and
the
benefit
officer,
18
if
any,
and
the
address
to
which
correspondence
to
each
of
them
19
may
be
directed.
20
d.
The
compensation
paid
by
the
benefit
corporation,
during
21
the
year,
to
each
director
in
the
capacity
of
a
director.
22
e.
The
opinion
of
the
benefit
director
described
in
section
23
490B.302,
subsection
3.
24
f.
A
statement
of
any
connection
between
the
organization
25
that
established
the
third-party
standard,
or
its
directors,
26
officers,
or
any
holder
of
five
percent
or
more
of
the
27
governance
interests
in
the
organization,
and
the
benefit
28
corporation
or
its
directors,
officers,
or
any
holder
of
five
29
percent
or
more
of
the
outstanding
shares
of
the
benefit
30
corporation,
including
any
financial
or
governance
relationship
31
which
might
materially
affect
the
credibility
of
the
use
of
the
32
third-party
standard.
33
g.
If
the
benefit
corporation
has
dispensed
with,
or
34
restricted
the
discretion
or
powers
of,
the
board
of
directors,
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a
description
of
all
of
the
following:
1
(1)
Each
person
who
exercises
the
powers,
duties,
and
rights
2
of
the
benefit
corporation
and
who
has
the
immunities
of
the
3
board
of
directors.
4
(2)
The
person
who
is
designated
as
a
benefit
director
or
5
who
exercises
the
powers
and
duties
of
a
benefit
director
as
6
required
by
section
490B.302.
7
2.
If,
during
the
year
covered
by
a
benefit
report,
8
a
benefit
director
resigned
from
or
refused
to
stand
for
9
reelection
to
the
position
of
benefit
director,
or
was
removed
10
from
the
position
of
benefit
director,
and
the
benefit
director
11
furnished
the
benefit
corporation
with
written
correspondence
12
concerning
the
circumstances
surrounding
the
resignation,
13
refusal,
or
removal,
the
benefit
report
shall
include
that
14
correspondence
as
an
exhibit.
15
3.
Neither
the
benefit
report
nor
the
assessment
of
the
16
performance
of
the
benefit
corporation
in
the
benefit
report
17
required
by
subsection
1,
paragraph
“b”
,
is
required
to
be
18
audited
or
certified
by
a
third
party.
19
Sec.
15.
NEW
SECTION
.
490B.402
Availability
of
annual
20
benefit
report
——
filing
——
fee.
21
1.
A
benefit
corporation
shall
send
its
annual
benefit
22
report
to
each
shareholder
on
the
earlier
of
any
of
the
23
following:
24
a.
One
hundred
twenty
days
following
the
end
of
the
fiscal
25
year
of
the
benefit
corporation.
26
b.
The
date
that
the
benefit
corporation
delivers
any
other
27
annual
report
to
its
shareholders.
28
2.
A
benefit
corporation
shall
post
all
of
its
benefit
29
reports
on
the
public
portion
of
its
internet
site,
if
any.
30
However,
the
compensation
paid
to
directors
and
financial
or
31
proprietary
information
included
in
a
benefit
report
required
32
pursuant
to
section
490B.401
may
be
omitted
from
the
benefit
33
reports
as
posted.
34
3.
a.
Concurrently
with
the
delivery
of
the
benefit
report
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to
shareholders
under
subsection
1,
the
benefit
corporation
1
shall
deliver
a
copy
of
the
benefit
report
to
the
secretary
2
of
state
for
filing.
However,
the
compensation
paid
to
3
directors
and
financial
or
proprietary
information
included
in
4
the
benefit
report
may
be
omitted
from
the
benefit
report
as
5
delivered
to
the
secretary
of
state.
6
b.
The
secretary
of
state
may
impose
and
collect
a
fee
of
7
not
more
than
ten
dollars
for
filing
a
benefit
report.
8
EXPLANATION
9
GENERAL.
This
bill
allows
a
business
corporation
to
10
incorporate
and
operate
as
a
benefit
corporation,
generally
11
subject
to
the
Iowa
business
corporation
Act
(Code
chapter
490)
12
except
as
provided
in
the
bill’s
new
Code
chapter
(Code
chapter
13
490B).
14
ELECTION
TO
ATTAIN
OR
TERMINATE
BENEFIT
CORPORATION
STATUS.
15
The
bill
provides
that
a
business
corporation
attains
or
16
terminates
its
status
as
a
benefit
corporation
by
shareholder
17
election.
The
election
must
be
by
an
affirmative
vote
of
18
at
least
two-thirds
of
each
of
the
corporation’s
classes
of
19
shareholders,
or
a
higher
vote
threshold
if
required
in
its
20
articles
of
incorporation
(referred
to
as
a
“minimum
status
21
vote”).
22
ARTICLES
OF
INCORPORATION.
The
bill
provides
that
a
benefit
23
corporation’s
articles
of
incorporation
must
have
as
a
purpose
24
the
creation
of
a
general
public
benefit
which
provides
some
25
material
positive
impact
on
society
or
the
environment
as
26
assessed
against
a
third-party
standard.
The
bill
provides
27
that
a
benefit
corporation’s
articles
of
incorporation
may
28
list
one
or
more
specific
public
purposes,
including
providing
29
low-income
or
underserved
individuals
or
communities
with
30
beneficial
products
or
services,
promoting
economic
opportunity
31
beyond
the
creation
of
jobs
in
the
normal
course
of
business,
32
preserving
the
environment,
improving
human
health,
promoting
33
the
arts
or
sciences,
or
increasing
the
flow
of
capital
to
34
entities
with
a
public
benefit
purpose.
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BOARD
ACTION.
The
bill
requires
a
benefit
corporation’s
1
board
of
directors,
in
addition
to
its
fiduciary
duty
to
make
2
decisions
based
on
financial
interests,
to
also
consider
3
factors
associated
with
creating
a
general
public
benefit
or
4
furthering
a
specific
public
benefit,
or
other
beneficial
5
goal.
The
bill
requires
the
board
of
directors
to
consider
6
the
effects
of
its
actions
upon
its
shareholders,
employees,
7
and
workforce;
subsidiaries
and
suppliers;
customers
as
8
beneficiaries
of
the
general
or
specific
public
benefit
9
purposes;
the
impacts
upon
the
community;
the
local
and
global
10
environment;
and
the
short-term
and
long-term
interests
of
the
11
benefit
corporation.
The
bill
limits
a
director’s
personal
12
liability
due
to
any
failure
of
the
benefit
corporation
to
13
accomplish
a
general
or
specific
public
benefit
purpose.
14
LEGAL
ACTIONS.
The
bill
prohibits
a
person
from
bringing
an
15
action
against
a
benefit
corporation
or
its
directors,
except
16
in
a
benefit
enforcement
proceeding.
A
benefit
enforcement
17
proceeding
can
only
be
commenced
by
the
benefit
corporation
18
or
derivatively
by
a
person
or
group
that
holds
shares
in
19
the
corporation
or
an
equity
interest
in
the
corporation,
by
20
a
director,
or
by
any
other
person
or
group
provided
in
the
21
articles
of
incorporation.
22
BENEFIT
DIRECTOR
AND
OFFICER.
The
bill
requires
a
public
23
corporation’s
board
of
directors
to
include
a
benefit
director.
24
A
privately
held
benefit
corporation’s
board
may
include
25
such
director.
Such
director
must
be
independent,
having
26
no
material
relationship
with
the
benefit
corporation.
The
27
bill
provides
that
a
benefit
corporation
may
have
a
benefit
28
officer
who
is
charged
with
overseeing
the
creation
of
the
29
corporation’s
general
public
benefit
or
a
specific
public
30
benefit.
31
REPORT.
The
bill
requires
a
benefit
corporation
to
prepare
32
an
annual
benefit
report
to
its
shareholders.
The
report
is
33
to
be
prepared
by
its
benefit
officer,
if
it
has
one.
The
34
report
must
include
the
process
and
rationale
for
selecting
a
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third-party
standard
used
to
prepare
the
benefit
report,
the
1
ways
in
which
the
benefit
corporation
pursued
its
general
and
2
specific
public
benefits,
any
circumstances
that
hindered
the
3
creation
of
a
general
or
specific
public
benefit,
an
assessment
4
of
the
overall
social
or
environmental
performance
of
the
5
benefit
corporation
prepared
in
accordance
with
a
third-party
6
standard,
and
a
statement
prepared
by
the
benefit
director
7
indicating
whether
the
benefit
corporation
pursued
its
general
8
or
any
specific
public
benefit
purpose.
The
bill
also
requires
9
the
benefit
corporation
to
file
the
benefit
report
with
the
10
secretary
of
state
and
pay
the
secretary
of
state
a
filing
fee.
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