Saturday, May 12, 2012

Benefit Corporation Approved in California

At last California approved at the beginning of the year AB361 which will allow SeThInk Media to officially incorporate within the desired framework that we have been working so hard over the past years to establish under:

New Form Of Corporate Entity Approved In California:
Meet The Benefit Corporation

Governor Brown recently signed AB 361 which authorizes the creation of a new form of corporate entity in California known as a benefit corporation. 

Previously general corporations and non-profit companies represented the two ends of the corporate spectrum, with general corporations acting as for-profit enterprises answerable to shareholders, and non-profits created for public benefit, mutual benefit or religious purposes.

The new benefit corporation, organized under the general corporations law, would be a for-profit company but one formed for the purpose of creating general public benefit. “General public benefit means a material positive impact on society and the environment.” Cal. Corp. Code 14600(c)

Benefit corporations may also specify a specific public benefit in their articles of incorporation. Section 14600(e) of the Corporations Code states that a specific public benefits can include:

(1) Providing low-income or underserved individuals or communities with beneficial products or services.
(2) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the ordinary 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.
(7) The accomplishment of any other particular benefit for society

Due to the nature of benefit corporations, directors of such companies have a duty to consider the impact of any decision not only on shareholders but, among other things, on employees, customers, the community and the environment. Cal. Corp. Code 14620(b)