SB427 Summary

• Adds Chapter 12 to Title 10A of the Alabama Code to authorize the creation of benefit corporations and benefit limited liability companies as new business entity types.

• Benefit entities must state in their organizing documents whether they pursue a general public benefit, specific public benefit, or both, and benefit managers may consider effects on these public benefits when making business decisions.

• Each benefit entity must designate one independent benefit manager who cannot be an employee, own 5% or more profits, or be related to such parties, and this manager's affirmative vote is required for amendments, dissolution, conversions, or mergers.

• Benefit entities must file annual reports with the Secretary of State by April 1 containing financial statements, third-party standards used, and a designated manager's assessment of compliance with stated purposes; failure to file results in revocation of benefit status.

• Benefit entities qualify for business incentives including treatment as industrial or research enterprises and approved activities for tax credit purposes under Chapters 9B, 9G, and Article 16 of Title 40.