HB 331 Summary

• Authorizes the formation and regulation of benefit corporations in Alabama, a new business entity type designed to create general and specific public benefits alongside shareholder returns.

• Permits existing business corporations to convert to benefit corporation status and allows benefit corporations to terminate their status, both requiring approval by at least two-thirds of shareholder votes.

• Requires benefit corporation directors and officers to consider the interests of shareholders, employees, customers, communities, the environment, and the corporation's ability to achieve its public benefit purposes when making decisions.

• Establishes the optional position of "benefit director" (mandatory for publicly traded benefit corporations) who must be independent and prepare an annual statement assessing the corporation's compliance with its benefit purposes.

• Mandates annual benefit reports to shareholders detailing how the corporation pursued its general and specific public benefits, assessed using third-party standards, filed with the Secretary of State for a $70 fee.