Bill Text: MN HF697 | 2011-2012 | 87th Legislature | Introduced
Bill Title: For-profit community enhancement incorporation provided.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2011-02-24 - Introduction and first reading, referred to Commerce and Regulatory Reform [HF697 Detail]
Download: Minnesota-2011-HF697-Introduced.html
1.2relating to corporations; providing for incorporation of for-profit community
1.3enhancement corporations;proposing coding for new law as Minnesota Statutes,
1.4chapter 304A.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [304A.01] CITATION.
1.7This chapter may be cited as the "Minnesota Community Enhancement Corporation
1.8Act."
1.9 Sec. 2. [304A.02] DEFINITIONS.
1.10 Subdivision 1. Applicability. For purposes of this chapter, the terms defined in this
1.11section have the meanings given.
1.12 Subd. 2. Community enhancement. "Community enhancement" means
1.13providing directly or indirectly through for-profit business undertakings public goods and
1.14improvements and advantages for the general public well-being of local, state, national, or
1.15world communities.
1.16 Subd. 3. Stakeholder. "Stakeholder" means:
1.17(1) a shareholder;
1.18(2) an employee;
1.19(3) a customer;
1.20(4) a community of interest; or
1.21(5) a creditor.
2.1 Subd. 4. Best interests of the corporation. The best interests of the corporation
2.2means those goals and objectives which are reasonably thought to provide for long-term
2.3community enhancement or to advance one or more interests of stakeholders.
2.4 Sec. 3. [304A.03] RELATIONSHIP TO OTHER LAW.
2.5Chapter 302A, including its definitions, applies to corporations incorporated or
2.6governed under this chapter, except as otherwise provided in this chapter, or where chapter
2.7302A conflicts with this chapter.
2.8 Sec. 4. [304A.04] INCORPORATION.
2.9(a) A for-profit corporation may be incorporated under this chapter to pursue one or
2.10more modes of community enhancement as stated in its articles of incorporation.
2.11(b) The secretary of state shall maintain the corporation's incorporation records in
2.12a manner that clearly distinguishes community enhancement corporations incorporated
2.13under this chapter.
2.14(c) A corporation incorporated under this chapter shall include as part of its corporate
2.15name the phrase "community enhancement corporation" or the abbreviation "CEC."
2.16 Sec. 5. [304A.05] STANDARD OF CONDUCT; DIRECTORS.
2.17 Subdivision 1. Standard; liability. (a) A director of a community enhancement
2.18corporation shall seek the best interests of the corporation:
2.19(1) in good faith;
2.20(2) in a manner the director reasonably believes to be in the best interests of the
2.21corporation; and
2.22(3) with the care an ordinarily prudent person in a like position would exercise
2.23under similar circumstances.
2.24(b) A person who satisfies the requirements of paragraph (a) is not liable by reason
2.25of being or having been a director of the corporation.
2.26(c) Nothing in this chapter creates liability to, or a cause of action in favor of, a
2.27person other than the corporation or a shareholder.
2.28 Subd. 2. Reliance. (a) A director is entitled to rely on information, opinions,
2.29reports, or statements, including financial statements and other financial data, in each case
2.30prepared or presented by:
2.31(1) one or more officers or employees of the corporation whom the director
2.32reasonably believes to be reliable and competent in the matters presented;
3.1(2) counsel, public accountants, or other persons as to matters that the director
3.2reasonably believes are within the person's professional or expert competence; or
3.3(3) a committee of the board upon which the director does not serve, duly established
3.4in accordance with section 302A.241, as to matters within its designated authority, if the
3.5director reasonably believes the committee to merit confidence.
3.6(b) Paragraph (a) does not apply to a director who has knowledge concerning
3.7the matter in question that makes the reliance otherwise permitted by paragraph (a)
3.8unwarranted.
3.9 Subd. 3. Presumption of assent; dissent. A director who is present at a meeting of
3.10the board when an action is approved by the affirmative vote of a majority of the directors
3.11present is presumed to have assented to the action approved, unless the director:
3.12(1) objects at the beginning of the meeting to the transaction of business because
3.13the meeting is not lawfully called or convened and does not participate thereafter in the
3.14meeting, in which case the director shall not be considered to be present at the meeting
3.15for any purpose of this chapter;
3.16(2) votes against the action at the meeting; or
3.17(3) is prohibited by section 302A.255 from voting on the action.
3.18 Subd. 4. Elimination or limitation of liability. A director's personal liability to the
3.19corporation or its shareholders for monetary damages for breach of fiduciary duty as a
3.20director may be eliminated or limited in the articles. The articles shall not eliminate or
3.21limit the liability of a director:
3.22(1) for any breach of the director's duty of loyalty to the corporation or its
3.23shareholders;
3.24(2) for acts or omissions not in good faith or that involve intentional misconduct
3.25or a knowing violation of law;
3.26(3) under section 80A.76 or 302A.559;
3.27(4) for any transaction from which the director derived an improper personal benefit;
3.28or
3.29(5) for any act or omission occurring prior to the date when the provision in the
3.30articles eliminating or limiting liability becomes effective.
3.31 Sec. 6. [304A.06] STANDARD OF CONDUCT; OFFICERS.
3.32(a) An officer of a community enhancement corporation shall discharge the fiduciary
3.33duties of the office loyally, in good faith, in a manner that the officer believes to be in the
3.34best interests of the corporation, and with the care an ordinarily prudent person in a like
3.35position would exercise under similar circumstances.
4.1(b) Nothing in this chapter creates liability to, or a cause of action in favor of, a
4.2person or entity other than the corporation or a shareholder.
4.3(c) This section, and not section 302A.361, applies under this chapter.
4.4 Sec. 7. [304A.07] STAKEHOLDER ENGAGEMENT.
4.5 Subdivision 1. Stakeholder impact. The board of a community enhancement
4.6corporation shall provide reasonable constructive opportunities for stakeholder
4.7engagement with the corporation, its officers, and its board.
4.8 Subd. 2. Public interest reports. A community enhancement corporation shall
4.9make an annual report to the public on its financial condition and describing its efforts
4.10with respect to achieving community enhancement and constructively engaging with
4.11material stakeholder interests.
4.12 Sec. 8. EFFECTIVE DATE.
4.13Sections 1 to 7 are effective the day following final enactment.
1.3enhancement corporations;proposing coding for new law as Minnesota Statutes,
1.4chapter 304A.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [304A.01] CITATION.
1.7This chapter may be cited as the "Minnesota Community Enhancement Corporation
1.8Act."
1.9 Sec. 2. [304A.02] DEFINITIONS.
1.10 Subdivision 1. Applicability. For purposes of this chapter, the terms defined in this
1.11section have the meanings given.
1.12 Subd. 2. Community enhancement. "Community enhancement" means
1.13providing directly or indirectly through for-profit business undertakings public goods and
1.14improvements and advantages for the general public well-being of local, state, national, or
1.15world communities.
1.16 Subd. 3. Stakeholder. "Stakeholder" means:
1.17(1) a shareholder;
1.18(2) an employee;
1.19(3) a customer;
1.20(4) a community of interest; or
1.21(5) a creditor.
2.1 Subd. 4. Best interests of the corporation. The best interests of the corporation
2.2means those goals and objectives which are reasonably thought to provide for long-term
2.3community enhancement or to advance one or more interests of stakeholders.
2.4 Sec. 3. [304A.03] RELATIONSHIP TO OTHER LAW.
2.5Chapter 302A, including its definitions, applies to corporations incorporated or
2.6governed under this chapter, except as otherwise provided in this chapter, or where chapter
2.7302A conflicts with this chapter.
2.8 Sec. 4. [304A.04] INCORPORATION.
2.9(a) A for-profit corporation may be incorporated under this chapter to pursue one or
2.10more modes of community enhancement as stated in its articles of incorporation.
2.11(b) The secretary of state shall maintain the corporation's incorporation records in
2.12a manner that clearly distinguishes community enhancement corporations incorporated
2.13under this chapter.
2.14(c) A corporation incorporated under this chapter shall include as part of its corporate
2.15name the phrase "community enhancement corporation" or the abbreviation "CEC."
2.16 Sec. 5. [304A.05] STANDARD OF CONDUCT; DIRECTORS.
2.17 Subdivision 1. Standard; liability. (a) A director of a community enhancement
2.18corporation shall seek the best interests of the corporation:
2.19(1) in good faith;
2.20(2) in a manner the director reasonably believes to be in the best interests of the
2.21corporation; and
2.22(3) with the care an ordinarily prudent person in a like position would exercise
2.23under similar circumstances.
2.24(b) A person who satisfies the requirements of paragraph (a) is not liable by reason
2.25of being or having been a director of the corporation.
2.26(c) Nothing in this chapter creates liability to, or a cause of action in favor of, a
2.27person other than the corporation or a shareholder.
2.28 Subd. 2. Reliance. (a) A director is entitled to rely on information, opinions,
2.29reports, or statements, including financial statements and other financial data, in each case
2.30prepared or presented by:
2.31(1) one or more officers or employees of the corporation whom the director
2.32reasonably believes to be reliable and competent in the matters presented;
3.1(2) counsel, public accountants, or other persons as to matters that the director
3.2reasonably believes are within the person's professional or expert competence; or
3.3(3) a committee of the board upon which the director does not serve, duly established
3.4in accordance with section 302A.241, as to matters within its designated authority, if the
3.5director reasonably believes the committee to merit confidence.
3.6(b) Paragraph (a) does not apply to a director who has knowledge concerning
3.7the matter in question that makes the reliance otherwise permitted by paragraph (a)
3.8unwarranted.
3.9 Subd. 3. Presumption of assent; dissent. A director who is present at a meeting of
3.10the board when an action is approved by the affirmative vote of a majority of the directors
3.11present is presumed to have assented to the action approved, unless the director:
3.12(1) objects at the beginning of the meeting to the transaction of business because
3.13the meeting is not lawfully called or convened and does not participate thereafter in the
3.14meeting, in which case the director shall not be considered to be present at the meeting
3.15for any purpose of this chapter;
3.16(2) votes against the action at the meeting; or
3.17(3) is prohibited by section 302A.255 from voting on the action.
3.18 Subd. 4. Elimination or limitation of liability. A director's personal liability to the
3.19corporation or its shareholders for monetary damages for breach of fiduciary duty as a
3.20director may be eliminated or limited in the articles. The articles shall not eliminate or
3.21limit the liability of a director:
3.22(1) for any breach of the director's duty of loyalty to the corporation or its
3.23shareholders;
3.24(2) for acts or omissions not in good faith or that involve intentional misconduct
3.25or a knowing violation of law;
3.26(3) under section 80A.76 or 302A.559;
3.27(4) for any transaction from which the director derived an improper personal benefit;
3.28or
3.29(5) for any act or omission occurring prior to the date when the provision in the
3.30articles eliminating or limiting liability becomes effective.
3.31 Sec. 6. [304A.06] STANDARD OF CONDUCT; OFFICERS.
3.32(a) An officer of a community enhancement corporation shall discharge the fiduciary
3.33duties of the office loyally, in good faith, in a manner that the officer believes to be in the
3.34best interests of the corporation, and with the care an ordinarily prudent person in a like
3.35position would exercise under similar circumstances.
4.1(b) Nothing in this chapter creates liability to, or a cause of action in favor of, a
4.2person or entity other than the corporation or a shareholder.
4.3(c) This section, and not section 302A.361, applies under this chapter.
4.4 Sec. 7. [304A.07] STAKEHOLDER ENGAGEMENT.
4.5 Subdivision 1. Stakeholder impact. The board of a community enhancement
4.6corporation shall provide reasonable constructive opportunities for stakeholder
4.7engagement with the corporation, its officers, and its board.
4.8 Subd. 2. Public interest reports. A community enhancement corporation shall
4.9make an annual report to the public on its financial condition and describing its efforts
4.10with respect to achieving community enhancement and constructively engaging with
4.11material stakeholder interests.
4.12 Sec. 8. EFFECTIVE DATE.
4.13Sections 1 to 7 are effective the day following final enactment.
