HB 06356 Summary

• Establishes a new legal framework for "benefit corporations" — business corporations that elect to pursue general public benefit (material positive impact on society and environment) in addition to profit, effective October 1, 2013.

• Requires benefit corporations to consider effects on shareholders, employees, customers, communities, environment, and long-term interests when making decisions, while protecting directors and officers from personal liability for failure to achieve stated benefits.

• Mandates annual benefit reports assessing performance against third-party standards, with disclosure of benefit director/officer roles, director compensation, and any conflicts of interest with the standard-setting organization.

• Allows existing corporations to convert to benefit corporation status with minimum status vote approval (two-thirds of each voting class) and permits benefit corporations to adopt "legacy preservation provisions" requiring asset distribution to other benefit or charitable organizations upon dissolution.

• Grants appraisal rights to shareholders of non-benefit corporations who are required to become benefit corporation shareholders through merger or share exchange, allowing them to seek fair value payment for their shares.