Senate Bill 22-045 Summary

• Requires two-thirds shareholder approval for non-public benefit corporations to amend articles to become a public benefit corporation, convert to one, or merge into one, and grants dissenting shareholders appraisal rights in these transactions.

• Prohibits non-public benefit corporations from being constituent entities in mergers or conversions involving public benefit corporations.

• Protects public benefit corporation directors from liability for balancing public benefit with shareholder interests by clarifying that director stock ownership alone does not create a conflict of interest and failures to balance do not constitute breach of duty.

• Modifies shareholder enforcement procedures for public benefit corporation duties by expanding standing to include any individual, derivative, or other action types and raising the ownership threshold to two percent of shares or $2 million market value for exchange-listed corporations.

• Act takes effect 90 days after final adjournment unless a referendum petition is filed, in which case voter approval at the November 2022 general election is required.